Altech Chemicals Limited has shared a few takeaways from the high purity alumina (HPA) market outlook report by CRU Consulting (CRU) that they received recently.
The unconstrained demand forecast for 4N+ (99.99% or greater) HPA is significantly stronger than CRU’s earlier forecast in 2018. The report projects a deficit market for HPA, which is unlikely to support a potential demand growth of 30% CAGR in the period from 2018 to 2028. Demand is likely to increase from 19,000 tonnes p.a. (2018) to 272,000 tonnes (2028). However, demand growth will be limited to 17% CAGR. Based on CRU’s 4N+ HPA price forecast Altech’s project NPV increases by 32% to US$669 million and project EBITDA increases from US$76 million to US$100 million per annum. A tight supply will further lift the HPA prices.
This is the market segment that Altech’s plant is designed to supply once their plant is ready. Altech’s planned 4,500 tonne p.a. of production would cater to only be small part of the total demand. CRU estimates that the market for HPA in powder form used in lithium-ion battery separators could reach 187,000 tonnes p.a. by 2028 if sufficient supply were available. HPA in the pellet/bead form used in LEDs is forecast to reach 85,000 tonnes p.a. by 2028, and is expected to exhibit greater price inelasticity, since synthetic sapphire is extensively used in the solidstate lighting industry.
CRU also commented on Altech’s HPA plant which is going to produce HPA in either pellet or powder form. It said that Altech “should be able to adapt its product mix to meet developments in the market, allowing it to maximise its ability to place all of its output once it begins operating, and to target the industry offering the highest purchase prices”.
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