Trimet Aluminium expects stronger aluminium demand in 2019 despite trade war and steep alumina prices

Executive board member of German aluminium producer Trimet Aluminium, Thomas Reuther said that he expects strong aluminium demand in 2019. However, forecast continues to remain difficult due to the global impact of U.S. import duties, according to him.

He pointed towards higher alumina price as a concern for the aluminium industry. Trimet, according to him, has not imported aluminium scrap from the U.S. despite the expectations that U.S. will export more scrap to Europe to compensate loss of export to China.

"I expect global demand for aluminium to increase in 2019," Reuther said in an interview during the LME week. "But the customs duties first imposed by the U.S. are having an impact on trade flows, so demand in regional markets is more difficult to forecast."

He said the scrap supply is abundant, with or without additional U.S. scrap being available. "Scrap imports from the United States have not increased," Reuther said commenting on scrap import from the U.S.

Sanctions against Rusal created supply concern for Trimet’s alumina needs. However, the company succeeded in securing alumina supply for their smelters.

"It is very important for the production of aluminium in Europe and worldwide that a positive and dependable agreement is reached about the U.S. sanctions on Rusal," Reuther said.

"The current situation with temporary solutions brings uncertainty into an already volatile market," he added.

He said that unless the correlation between aluminium and alumina price comes to normal, it is difficult to make any production forecast for next year. He also attributed the rising alumina prices to the 50% capacity cut and temporary production halt at Hydro’s Alunorte alumina refinery. He expects the situation to normalize in a few months.

He said that automobile construction is the key driver for demand growth, enhanced by electro-mobility. He also talked about the growing demand in the energy sector. Construction and packaging demand remains stable for Trimet.

Trimet's German plants produced some 625,000 tonnes of primary and recycled aluminium in FY 2017-18 ending on June 30, flat from last FY and around full capacity. Trimet France produced 140,000 tonnes of primary aluminium during same period, flat from last FY.