Upstream Weekly Recap: Aluminium market reacts to raw materials shortage in China with heightened price
The upstream sector of the global aluminium industry witnessed some important events this week. To begin with, LME aluminium price hit a 5-week high fuelled by the alumina shortage in China coupled with the weakening dollar that spurred fund buying. The price closed at US$2,435 per tonne after witnessing a growth of US$65.5 per tonne. The shortage of alumina, one of the key raw materials for producing aluminium, also created ripples in the China SMM market. China's domestic A00 aluminium ingot price had increased for the fifth consecutive day in tandem with the heightened price of the ore owing to tight supply and heightened demand. In July 2024, the world primary aluminium production saw a significant uptick, with strong output across all major metal-producing regions. According to the International Aluminium Institute (IAI), production increased by 3.54 per cent compared to the previous month and by 2.41 per cent annually. Other significant news that impacted the industry is mentioned below:
On Monday, the LME aluminium benchmark price had skyrocketed by US$76 per tonne or 3.31 per cent to close at US$2,369.50 per tonne. The next day the price had hit a five-week high driven by a shortage of alumina, a key raw material for aluminium production in leading producer China. The price settled at US$2,435 per tonne, followed by a growth of US$8 per tonne on Wednesday and US$28 per tonne on Thursday.
To know more: https://www.alcircle.com/news/lme-aluminium-benchmark-price-hikes-by-us28-t-shfe-price-grows-to-us2784-t-111784
China’s A00 aluminium ingot price opened the week on Monday, August 19 with a hike of RMB 230 per tonne to clock at RMB 19,460 per tonne, followed by a growth of RMB 30 per tonne and RMB 100 per tonne to arrive at RMB 19,490 per tonne. The price had expanded by RMB 100 per tonne on Wednesday owing to the shortage of alumina in China. On Thursday the price had grown by RMB 100 per tonne to reside at RMB 19,690 per tonne. The A00 aluminium ingot price closed the week with an upward of RMB 10 per tonne.
In July 2024, world primary aluminium production saw an uptick, fuelled by strong output across all major metal-producing regions. On a month-over-month basis, production increased by 3.54%, while on an annual basis, it rose by 2.41%, according to findings from the International Aluminium Institute.
The New Zealand Aluminium Smelter (NZAS) has agreed to further reduce its electricity consumption by an additional 20 megawatts to alleviate pressure on the national grid amid the current energy squeeze. This reduction comes on top of the 185MW demand cut the smelter recently implemented. Tiwai, the country's largest power consumer, typically accounts for around 13 per cent of New Zealand's total electricity usage under normal conditions.
To know more: https://www.alcircle.com/news/power-supply-challenges-lead-to-back-to-back-production-cuts-at-tiwai-aluminium-smelter-111748
In June and July 2024, China's use of liquid metal transfers, a common practice for moving aluminum into the market, saw a slowdown after a strong performance in the previous three months. The utilization of liquid metal transfers decreased by around 2 percent in both June and July. This method is particularly efficient in a busy market, allowing smelters to deliver metal directly into the customer's holding furnace.
Aluminium Bahrain B.S.C. (Alba) reaffirmed its commitment to advancing its workforce's expertise in the latest technologies by partnering with the Nasser Artificial Intelligence Research and Development Centre (NAIRDC), the R&D arm of the Nasser Vocational Training Centre (NVTC). Together, they have organized an intensive three-day course on 'Advanced Artificial Intelligence (AI) Applications in Industry 4.0,' which will be attended by 35 of Alba's employees.
Bahrain's non-oil exports experienced a positive growth, rising by 4% to BHD337 million (USD 894.31 million) in July 2024, compared to BHD323 million in July 2023, as reported by the Information & eGovernment Authority (iGA). The July 2024 Foreign Trade report provides a comprehensive analysis of Bahrain's trade performance, noting that the top 10 export destinations contributed 68% of the total export value.
To know more: https://www.alcircle.com/news/bahrains-july-2024-non-oil-exports-surge-aluminium-dominates-the-market-111776
Alpha HPA has begun construction on Stage 2 of the HPA First Project after confirming fire safety technology. Once completed, this project will be the world's largest high-purity aluminium materials manufacturing facility.
Aditya Birla Group-owned Hindalco Industries announced in its annual general meeting on August 22 that it would invest $10 billion in capacity expansions. Chairman Kumar Mangalam Birla distinctly outlined his plans for ongoing and near-term projects related to aluminium and copper smelters, including the Aditya flat-rolled product plant, a new alumina refinery in Rayadaga, and the Bay Minnette expansion in Novelis.
As Indonesian President Joko Widodo approaches the end of his decade-long tenure this October, his final State of the Nation address on August 16, 2024, highlighted a central theme of his economic policy: resource nationalism. Throughout his presidency, Jokowi has focused on leveraging Indonesia's abundant natural resources for the country's own development. This approach has garnered both praise and criticism on the global stage, deepening Indonesia's ties to the international community.
Komatsu delivered its 300th autonomous haulage system (AHS) truck to Rio Tinto's Pilbara operations in Western Australia, marking a significant milestone in the advancement of mining automation. This achievement reflects the ongoing partnership between the two industry leaders, which began in 2011 with a memorandum of understanding (MoU) to deploy 150 AHS trucks.
To know more: https://www.alcircle.com/news/rio-tinto-welcomes-300th-komatsu-autonomous-haulage-truck-at-pilbara-operations-wa-111740
The National Green Tribunal (NGT)'s decisive action against Mumbai-based Ashapura Minechem Limited for environmental violations marks a significant development in India's mining sector. The tribunal's investigation follows serious allegations of non-compliance with the specific conditions outlined in the Environmental Clearance (EC) granted to the company by the Ministry of Environment and Forests (MoEF), as reported by the Free Press Journal.
To know more: https://www.alcircle.com/news/dapoli-bauxite-mining-under-ngt-s-radar-for-alleged-environmental-violations-111750
The eastern Indian state of Jharkhand has moved closer to introducing new taxes on mineral production, a development that is expected to raise the prices of essential resources like coal and bauxite. The state assembly has passed the Jharkhand Mineral Bearing Land Cess Bill, which now awaits the governor's approval to become law, according to sources familiar with the matter.
To know more: https://www.alcircle.com/news/jharkhands-new-mining-tax-set-to-drive-up-mineral-prices-across-india-111762
Minister of Natural Resources Vickram Bharrat has expressed optimism about the future of large-scale mining in Guyana. On August 21, 2024, Minister Bharrat noted the sector's resurgence, especially in Region 10, where bauxite mining is making a notable comeback. This revival is not only strengthening the local economy but also creating valuable job opportunities for residents.
To know more: https://www.alcircle.com/news/large-scale-mining-to-drive-economic-growth-in-guyana-minister-111786
World's largest alumina refinery (outside China), Hydro Alunorte's recent fuel switch project is a key step towards Hydro's climate strategy and aligns with its global commitment to cut greenhouse gas emissions by 30 per cent by 2030. As per the reports, Hydro Alunorte's alumina refinery has begun using natural gas in its production process, replacing fuel oil.
ABx Group, an innovative Australian company focused on providing materials for a cleaner future, recently championed the importance of rare earth elements, green metals like aluminum, and clean energy from an environmental perspective. In a presentation at Parliament House, ABx Group's Managing Director, Dr. Mark Cooksey, argued that Australia has the potential to become a clean energy superpower by boosting aluminum production and supporting local rare earth projects.
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