Rio Tinto not to lift force majeure on Asia aluminum supply

Rio Tinto Alcan has no immediate plans to lift a force majeure on primary aluminum shipments to customers in the Asia Pacific, spokesman Bryan Tucker said late Monday, although quality problems at the Sohar Aluminium joint venture smelter has been brought under control.

The smelter is turning out 100% on-spec material, and currently running its 365,000 mt/year facility at full capacity, Sohar spokeswoman Lisa Christowitz told Platts at the weekend.

Rio Tinto Alcan on July 19 declared force majeure on supplies of P1020 standard 99.7% aluminum ingot to all customers in Asia, citing quality issues at Sohar. According to sources, Rio Tinto Alcan explained in a letter to customers that the breakdown of certain critical plant equipment had made it difficult for Sohar to control deviations in quality.

Rio Tinto Alcan has a 20% share in the Sohar smelter and manages the metal that is destined for export. The force majeure notice does not cover liquid metal that is sold to domestic customers in Oman, Tucker said earlier.

Tucker said Monday that Rio Tinto Alcan was constantly evaluating the situation but he was not able to give a time frame for the lifting the force majeure on supplies.

Meanwhile, a customer said Monday: "We have a contract with Rio Tinto Alcan to receive 99.7% P1020 ingot every month in Thailand, and were informed that Rio Tinto Alcan will deliver the agreed volumes in August. I don't know whether our supplies will be coming from Sohar or other plants."

Japanese trading houses and end-users who do not normally receive metal from Sohar, also received the force majeure notice.

Japan is set to start contract price negotiations next week for the fourth quarter, and participants have been monitoring developments in Sohar.