Weekly Update 2: COVID19 leading companies to pursue new strategies while their sales & output taken back seat, April 11-24

The COVID19 impacts have brought in a lot of changes in planning, strategizing, and executions for the aluminium companies. Such was our observation over more than a week, from April 11 to April 24. While decline in European car sales by about 52 per cent in March, attributing to the lockdowns imposed for the containment of COVID19, as reported on April 17, did not escape our attention, nor we missed to report how Rio Tinto, with support from Motorola Solutions, is technologically gearing up to pursue delivery towards its consumers while safeguarding people and communities during the COVID-19 pandemic. So, let us here take a quick recap to some of such major market affairs and developments happened over the week, caused by COVID19.

• To start with, Fitch Ratings, the leading provider of credit ratings, headquartered in the USA, revised down its sovereign long-term foreign currency rating on Jamaica to stable from positive citing the expected negative shocks of its exports of bauxite, alumina, and remittances due to the COVID-19 pandemic. The rating agency projected the economy to shrink by 4% in 2020, followed by a recovery of 2% in 2020, and thus, Jamaica’s B+ rating was asserted.
• Due to the lack of liquidity as an impact of COVID19, Norsk Hydro’s North American extrusion unit is considering cost-cutting measures to balance the reducing revenues and also to protect the unit’s cash balance economic plunge related to the epidemic. At the unit, the plunging of revenues has augmented the need for working capital 15% over the past month, and the worst is yet to come. The unit has projected that sales might dip by up to 30% in April and May’20, causing a remarkable jump in inventory.
• China’s daily aluminium production in March has been found declined by 1.7 per cent compared to the earlier two months, attributing to supply disruption and incessant price fall of the metal due to the COVID19 outbreak, according to Reuters calculations. Reuters learned China’s total daily aluminium output in January and February of this year was 97,450 tonnes, which in March declined to 95,800 tonnes, the lowest daily rate since October.

• New-car sales in Europe’s major markets in March also dwindled by 52 per cent, attributing to the lockdowns imposed for the containment of COVID19. Registrations dropped to 853,077 vehicles in the European Union, Britain, and the European Free Trade Association (EFTA) countries, marking the lowest since 1990 when ACEA started compiling data. Similar slumps have been found in China and the US as well.
• FIMI, the mining body of India, has urged the government of India to remove the 15% export duty on non-metallurgical grade bauxite, as the COVID19 has hit all industrial sectors of the country.

But amidst the economy slowdown, cost-curtails, and production drop due to the severe effects of the virus, the aluminium companies left no behind in battling the virus by enhancing their technology or by producing own hand sanitiser or distributing sanitary kits.

• Elite Mining Guinea SA offered a large batch of sanitary kits to the National Health Security Agency and food supplies to the communities impacted by its activities in the field. This donation is made up of 100 COVID-19 rapid test molecules for the ANSS, 5 tonnes of rice, 20 boxes of soap and 10 Thermo flashes for the communities impacted by this mining project.
• In addition to the New Zealand Aluminium Smelter (NZAS) at Tiwai Point, Rio Tinto’s other aluminium laboratories such as its Tasmania’s Bell Bay site and Yarwun refinery in Gladstone have started making hand sanitiser. The aim is to ease the demand for hand sanitiser products during the COVID19 pandemic, as well as to help prevent the spread among its own staff.

• Rio Tinto, with support from Motorola Solutions, is pursuing delivery towards its consumers while safeguarding people and communities during the COVID-19 pandemic. The two multinational companies have joined hands to design and roll-out a back-up communications solution for Rio Tinto Aluminium’s Integrated Operations Centre (IOC), in Brisbane, Queensland.
• Pinjarra Alumina Refinery of Alcoa has opened funding applications for the next round of its Community Partnership program. The Alcoa Foundation has pledged more than $1.5 million to support coronavirus-relief effort in communities across the globe and is investigating where the support can be best directed in the Reginal Municipality of Peel.