U.S. alumina imports to grow in 2017 as producers seek to benefit from rising prices

<p>Global alumina market witnessed a steady demand growth in 2016, driven by the China factor. New smelter starts and old capacity restarts in China coupled with supply difficulties buoyed prices up both in China and ex-China market. In the U.S. too, integrated producers like erstwhile Alcoa Corp., fared reasonably well in the last quarter of the year due to high alumina prices. Alcoa was the top alumina producer in 2016, with a strong first-quarter cost position on the global cost curve. But then, barring Alcoa, the U.S. primary aluminium industry otherwise experienced a significant slowdown in operations and demand as they were faced by severe Chinese aluminium import onslaughts that kept continuing well through the year. This got reflected in the country's alumina trade as well.</p> <p>{newsStudioGallery}</p> <p>According to data released by the USGS, imports of alumina during the third quarter of 2016 were 315,000 tons, three per cent up from those in the second quarter but down 20 per cent from the third quarter of 2015. The leading sources of imported alumina during the period under review were Brazil (accounting for 38 per cent of total alumina imports) and Australia (accounting for 30 per cent imports) and Jamaica (accounting for 18 per cent of total alumina imports). However, if the cumulative year-over-year import data of alumina is taken into consideration, a marked increase in import volume can be observed.<br /><br /><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/USAluminaImportGraph1.jpg" alt="News" width="517" height="226" /><br />The U.S. imported a total volume of 773659.09 tonnes of alumina, valued at US$391.6 million, in 2015, which went up to touch 800607.9 tonnes in 2016. The alumina imports last year was valued at US$331.6 million. In 2017, till August, the U.S. is estimated to source 624074.2 tonnes of alumina from the international market with the value totalling US$265.4 million. <br /><br /><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/USAluminaImportGraph2.jpg" alt="News" width="517" height="226" /><br /><br />With the primary aluminium makers in the U.S. now focussing on upstream and downstream manufacturing separately, they are expected to create more demand for the commodity for the domestic industry use, this year. They can cater to the increasing demand for alumina either by curbing exports or by increasing imports. Going by the estimated data of 2017, alumina import is set to rise in the next fiscal.<br /><br />{googleAdsense}<br /><br />According to commodity analysts, alumina price may rise by another 17-23 per cent in 2017 as more Chinese aluminium smelters become operational. This is expected to increase alumina deficit to 4.8 million tonnes (MT) in FY17 and over 6 MT in FY18.</p>