Mexico is approaching the final stages of negotiations with the United States on reducing tariffs on aluminum and steel products, with officials indicating that a deal could significantly lower the effective tariff burden on Mexican exporters. Luis Rosendo Gutiérrez, Mexico’s undersecretary of foreign trade, said talks had made progress during the National Auto Parts Industry congress. Discussions covering the automotive sector are targeting a 15% tariff, which could fall to an effective rate of around 4% to 5% after deductions linked to regional value content. The potential reduction would bring Mexico closer to tariff levels faced by competitors including Japan, South Korea and Germany, improving the position of Mexican suppliers in the US market. Explore the production, demand and...
CLSA expects the Odisha High Court’s dismissal of Vedanta Aluminium Metal’s bauxite petition to have a muted medium-term impact, despite a potential one-time liability and higher aluminium production costs. The Odisha High Court dismissed Vedanta Aluminium’s petition seeking bauxite supplies from Odisha Mining Corporation (OMC) at the historical rate of INR 1,000 (USD 10.38) per tonne. CLSA said the order could result in a one-time financial impact of up to USD 290 million, including interest, while also increasing the company’s aluminium production costs. The brokerage estimated OMC’s claim for historical dues at around INR 2,500 crore (USD 59.50 million) before tax, excluding interest. Including interest, the one-time impact could reach USD 290 million, equivalent to around 2.8 per cent...
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Prices of aluminium and other non-ferrous metals will remain low in near-term due to the muted demand on the back of uncertain macro-economic environment prevailing globally, ICRA said. "While prospects for the western economies have improved, concerns regarding slower growth of Chinese economy, largest consumer of base metals, have affected sentiments, leading to subdued price levels at the London Metal Exchange (LME)," ICRA's Senior Vice-President Jayanta Roy said in a release. Quite similar to the above would be the Indian story as well. The prices of base metal in India are influenced by import-parity prices. The movement of Indian rupee against US dollar would have a critical impact on the domestic prices in the coming weeks. According to Mr. Jayanta, though aluminium has a better...
The London Metal Exchange has been forced put on hold a new rule to tackle the long warehouse queues that US politicians and aluminium buyers blame for increasing the price of everything from drink cans to car bodies. Queues of more than 500 days to take delivery of aluminium from LME warehouses became the focus of a furious debate last year, triggering a series of complaints by metal users, criticism by senators and investigations by US regulators. MillerCoors, the brewer, claimed at a Senate hearing that the logjams at LME-registered warehouses owned by Goldman Sachs, Glencore Xstrata and other companies inflated global aluminium costs by billions of dollars – allegations that were fiercely disputed. Warehouse owners profit from long queues because they earn rent. Owners of the metal...
Chinese smelters are under “unprecedented” pressures, as about half of them are losing money due to ailing aluminium prices, Goldman Sachs said in its latest research note. "Following the recent Chinese domestic price declines, we estimate that 50%, or 11-12 million tonnes of Chinese output, is losing money on a cash cost basis, equal to almost 25% of world total supply. Of this, we estimate that all Chinese grid-based power producers - accounting for 25%-30% of Chinese supply - are losing cash at present," it said. So far this year, Chinese domestic aluminium prices have fallen by 10%, to their lowest levels in more than 16 years, which reflects "a dramatic ramp-up in low-cost smelter capacity in North and North Western China and a lack of closures of high-cost Chinese capacity outside...
The Odisha government is taking steps to sign a fresh Memorandum of Understanding (MoU) with Sesa Sterlite Ltd, after the merger of Vedanta Aluminium Ltd (VAL) with it. The move comes after the state law department advised the industries department to substitute the earlier MoU with a fresh one mentioning the new entity. “Kindly furnish the draft MoU to be signed between¬ industries department and M/ s Sesa Sterlite Ltd as advised by the law department in substituting the earlier MoU signed between the industries department with M/s Vedanta Aluminium Ltd on the wake of amalgamation of VAL with M/s Sesa Sterlite,” said S C Nayak, additional secretary with the industries department in a letter to Industrial Promotion And Investment Corporation Of Odisha Limited (IPICOL). Though the decision...
Novelis Inc. President and Chief Executive Officer Phil Martens issued the following statement today in response to Thursday's ruling by the UK High Court regarding planned changes to aluminum warehousing rules by the London Metal Exchange (LME): "We are very disappointed with the outcome of the legal process in the UK," said Martens. "We have worked closely with the LME and other stakeholders for two-and-a-half years to push for changes. Unfortunately, Rusal's unilateral action resulting in this court decision will stifle the LME's proposal to alleviate the unprecedented backlog at LME warehouses and will be very destructive to the market. "It is indefensible that queues of more than a year exist at warehouses and unconscionable that players in the aluminum market are actively working to...
Alcoa today announced it will curtail 147,000 metric tons of smelting capacity at its São Luís (Alumar) and Poços de Caldas smelters in Brazil due to challenging global market conditions in primary aluminum and increased costs that have made the smelters uncompetitive. The curtailments are expected to be complete by the end of May 2014. In 2013, the Company curtailed 34,000 metric tons at Poços and 97,000 metric tons at São Luís. The new curtailments will include the remaining 62,000 metric tons of capacity from the Poços smelter, resulting in a full curtailment of its three potlines. Another 85,000 metric tons will be curtailed at São Luís. “Across the globe, we are taking measures to curtail high-cost smelting capacity that is not competitive and reshape our cost profile,” said Bob...
UC RUSAL, a leading, global aluminium producer, announces its results for the year ended 31 December 2013. Key highlights • Low LME aluminium price driven by the negative investor sentiment exerted further pressure on the aluminium industry throughout the year ended 31 December 2013. Average LME aluminium price decreased by 8.6% from USD2,018 per tonne for the year ended 31 December 2012 to USD1,845 per tonne for the same period of 2013. However, thanks to cost reduction measures, working capital optimization and ongoing rationalization programme undertaken by the management supported by product mix improvement, weakened local currency and continuously growing premiums, UC RUSAL demonstrated Aluminium segment EBITDA margin of 11.3%. • Aluminium segment cost per tonne reduced to USD1,907...
Aluminium prices edged higher by 0.20 per cent to INR 102.10 per kg in futures trade today as speculators enlarged positions amid a firming trend overseas. Besides, increased demand at domestic spot markets also influenced the prices. At the Multi Commodity Exchange, aluminium for delivery in March rose 20 paise, or 0.20 per cent, to INR 102.10 per kg in a business turnover of 86 lots. Similarly, the metal for delivery in April traded higher by 20 paise, or 0.19 per cent, to INR 103.70 per kg in 39 lots. Market analysts said the rise in aluminium prices at futures trade was mostly due to a firming trend in copper and other base metals at the London Metal Exchange and rising demand at spot markets here.
Processing charges for A356 aluminum alloy in China are poised to rally in April as the peak-demand season arrives, Shanghai Metals Market foresees. Output at A356 aluminum alloy producers surveyed by SMM totaled 113,750 tonnes in March, up 3,750 tonnes from February. Operating rates averaged 68.94%, also up 2.27% month-on-month. This created a supply surplus. #441 silicon was offered at 13,500 yuan ($ 2,193) per tonne in Shanghai on March 26, and #3303 silicon was quoted at 14,200 yuan per tonne. Spot aluminum was offered lower at 12,380 yuan per tonne. This left a price spread of 1,200-1,800 yuan per tonne between silicon and the light metal, translating into a 100 yuan per tonne increase in production costs at alloy makers. Growing production costs, however, did not offer cost support...
UC RUSAL, a leading, global aluminium producer, announces that following a claimant case brought by RUSAL against the London Metal Exchange at the High Court of Justice, the presiding judge, Mr Justice Phillips found in favor of RUSAL. The award was issued in favor of RUSAL by Mr Justice Philips, who found that the LME’s original consultation and subsequent proposed rule change, were unlawful because fairness required the LME to consult on alternative options and, in particular, the option of the banning or capping of rents. As a result of this ruling, the LME’s original decision will be quashed and they will be required to carry out a fair and lawful consultation process which addresses the concerns of a number of market participants raised prior to and following the initial consultation...
Pål Kildemo has been appointed Head of Investor Relations in Norsk Hydro ASA and will, effective May 1, be responsible for Hydro's contact with investors and financial markets. He will report to Executive Vice President and CFO Eivind Kallevik. Kildemo joined Hydro's graduate program in 2008 in Energy business area. Since then he has held positions as risk controller and trader within Energy and is currently Investor Relations Officer. He has a Master's degree in Economics and Finance with Honours of the first degree from Heriot Watt University in Edinburgh, Scotland. Kildemo succeeds Rikard Lindqvist, who will leave Hydro to pursue other opportunities.
VHCL Industries Ltd’s Board of Directors reviewed the progress of their upcoming projects under metal division in a meeting that took place on 24th March, 2014. The Board noted the new Aluminum Alloy plant’s commissioning progress in its first phase. The capacity of the plant was 36,000 MTPA as per the schedule and would start the pretrial activities within 2014 March. This would be further followed by trial runs and commercial production will start in a few months. The Board observed aluminium alloy is in demand and the capacity added by the company will find an immediate market. Aluminium alloy is used in automobiles, food packaging housing & construction and even in electrical switch gear and also cable industries. This plant will help in generating additional revenue to their Rs. 450...
It was reported early this month that aluminum smelters in China are cutting production which could significantly improve the outlook for producers of the metal worldwide. China’s aluminum smelters are likely to shut about 2 million tons of operating capacity in the coming months as they try to limit losses amid falling prices and dwindling government support. While the Beijing government allowing businesses to fail has roiled other commodities markets, doing so is a boon to aluminum which still has high demand from the aerospace and automotive industries and therefore a cut in the mass of Chinese aluminum production actually means higher prices for the existing metal producers. On the LME, the cash price of primary aluminum increased 0.7 percent to $1,688 per metric ton. The Indian...
On Tuesday, aluminum’s 3 month forward prices ended the day on a positive note, higher by 1.24% at $1752 while March futures prices at the MCX settled at Rs 103.35, up by mere Rs 0.40 due to the rupee’s appreciation. We could see the metal advancing higher supported by lower inventory numbers released at the LME in the last two sessions. In two cumulative trading sessions, LME stocks declined by 14950 tons, which may have supported a rise in the metals along with better than expected consumer confidence number in the US and, the rising equities would have also supported the metals to trade higher. This morning, LME aluminum prices are seen trading at $1748 with no major change from the previous close. We believe that as the day progresses, the metal may remain on a higher note initially,...
The aluminium industry has called on EU policy makers to build on the European Council’s conclusions by developing robust measures to prevent further investment leakage. Gerd Götz, director general of the EAA, says, “We greatly appreciate that EU Member States are focusing on restoring industrial competitiveness and securing competitive energy costs, but we deplore the lack of urgency in this debate. The solutions to halt our industry’s decline are clear. We need cost compensation measures for EU ETS to address our inability to pass on indirect costs. We need an EU-wide framework for state aid guidelines to exempt us from the costs of energy support schemes, and we need long-term visibility to maintain investment in our sector. What we do not need is endless debate and discussion. We need...
Press Metal Bhd’s Mukah aluminium smelter will return to full production by April, almost nine months after it suffered catastrophic damage during the six-hour statewide power outage in mid last year. Group chief executive officer Datuk Koon Poh Keong (pic) said the plant was in total shut-down for four months, and repairs took another four months. “We’ve managed to recover. Right now we are almost back to 100% production capacity,” Koon told reporters at the factory here, which has a production capacity of 120,000 tonnes per annum. The factory, which began operations five years ago, was one of the first such plants in South East Asia. The mammoth facility (its main production house is 750m in length) consumes about 200MW of electricity, and was in the middle of the smelting process when...
ON Tuesday, BHP Billiton & National Union of Metalworkers of South Africa (NUMSA) met the 2nd time to discuss about the halting of smelting as well as associated services at the company’s Bayside aluminium smelter. Numsa has said there would be layoffs at KwaZulu-Natal facility that has a total of about 450 employees at present. But the compony did not comment on questions related to expected layoffs. "There is no update on Bayside. There are still ongoing discussions and consultations with all interested parties," BHP Billiton SA’s vice-president of communication and external affairs, Lulu Letlape, said. However, Stephen Nhlapo, NUMSA’s head of organising & collective bargaining said there is a possibility of closure of 70% of Bayside. This would result in the cut off of 350 jobs, he...
Aluminium Bahrain B.S.C. (Alba)’s Executives – Chief Executive Officer, Tim Murray, Chief Operations Officer, Isa Al Ansari and Chief Financial Officer, Ali Al Baqali recently concluded a successful visit to Ma’aden Aluminium, Saudi Arabia. Alba’s Executives met with Abdulaziz A. Al Harbi, President, Ma’aden Aluminium, and Phillip Campbell, Vice President, Mine & Refinery Operations, as well as other top Ma’aden officials. During the visit, Alba Executives were given a tour of Ma’aden’s aluminium smelter, rolling mill and alumina refinery. The two companies also discussed common interests related to safety, operations and training. Highlighting on the visit to Ma’aden, Alba’s Chief Executive Officer, Tim Murray said: “Alba shares enduring and strong business ties with Saudi Arabia. Our...
