In 2023, the International Aluminium Institute (IAI) reported a 2.25 per cent annual increase in global primary aluminium production, reaching a total of 70.593 million tonnes by the end of December. However, this growth rate marked a slight slowdown compared to the previous year when the industry experienced a 3 per cent increase, reaching 69.038 million tonnes in 2022 from 67.092 million tonnes in 2021.
By December 2023, the world's primary aluminium production had reached 6.04 million tonnes, contributing to a second-half output of 36.08 million tonnes. This H2 output reflected a notable 4.58 per cent increase from the first half, which stood at 34.5 million tonnes. The surge in production during the latter part of 2023 was attributed to alleviating the energy crisis in Europe, leading to the resumption of production at numerous smelters.
In December, global primary aluminium production exhibited a 3.25 per cent month-on-month increase, rising from 5.85 million tonnes to 6.04 million tonnes. Additionally, on a year-on-year basis, there was a 2.03 per cent growth from 5.92 million tonnes in December of the previous year, as the International Aluminium Institute (IAI) reported. The daily average production for the month stood at 194,900 tonnes, marginally lower than the 195,000 tonnes recorded in the preceding month.
According to the IAI, China's primary aluminium production in 2023 totalled 41.67 million tonnes, marking a 3.07 per cent increase compared to the previous year's 40.43 million tonnes. In December alone, China produced 3.57 million tonnes, reflecting a 3.58 per cent month-on-month rise from 3.45 million tonnes and a 2.59 per cent year-on-year increase from 3.48 million tonnes.
Approximately 75 per cent of all aluminium ever produced is now under active use, per estimates provided by the Aluminium Association. Given the widespread recognition of aluminium as a highly sustainable alternative, several businesses are actively working to reduce the carbon emissions associated with the aluminium industry.
With around 6.7 million tonnes of aluminium produced, the company reported operating revenue of RMB 1,884 billion for the first three quarters, achieving a total profit of RMB 110.59 billion and a net profit of RMB 92 billion. Notably, the net profit attributable to the parent company stood at RMB 53.52 billion, surpassing the RMB 41.92 billion recorded in the same period of 2022. Despite facing challenges such as fluctuating market prices and localized production constraints leading to reduced output, Chinalco demonstrated resilience and growth. The company credited its success to leading cost competitiveness and advantages in the industrial chain.
The aluminium market in China experienced increased volatility throughout the year, posing continuous challenges to business operations. However, in the year's second half, Chinalco capitalized on the recovery of the aluminium oxide and electrolytic aluminium markets. Leveraging its full industrial chain advantage, the company ensured stable and optimized production of its main products, leading to an expansion in profitability.
Data indicated that third-quarter production of refined aluminium oxide and electrolytic aluminium increased compared to the second quarter. Chinalco exceeded its progress target for operating profit in the third quarter, achieving a non-GAAP net profit growth of 10.76 per cent year-on-year, solidifying its position as an industry leader.
Established in 1994, China Hongqiao Group Limited is a prominent company specializing in aluminium production. During the first half of 2023 (H12023), Hongqiao Group's revenue amounted to approximately RMB 65,733.9 million, representing a year-on-year decrease of roughly 4.4 per cent. The gross profit for the same period amounted to approximately RMB 58,923.6 million, reflecting a significant year-on-year decline of about 60.6 per cent.
Furthermore, the net profit attributable to shareholders of the Company stood at approximately RMB 24,566.23, signalling a substantial year-on-year decrease of roughly 68.7 per cent. In the same period, the Group's sales volume of aluminium alloy products reached approximately 2.824 million tonnes, indicating an increase of nearly 5.7 per cent compared to the sales volume of about 2.670 million tonnes for the corresponding period in the previous year.
Presently, Hongqiao is the world's second-largest aluminium producer, trailing behind Chinalco. With a production capacity of 6.212 million tonnes, the Group's output of aluminium alloy products reached approximately 3.059 million tonnes, showcasing a Y-o-Y increase of roughly 4.4 per cent. Simultaneously, the production of aluminium fabrication products amounted to roughly 377,000 tonnes, marking a year-on-year increase of approximately 4.3 per cent.
During the first half of 2023, Rusal generated total revenue of US$ 5,945 million. In H1 2023, the global supply of primary aluminium climbed by 2.4 per cent year on year to 34.4 million tonnes. In H1 2023 the total amount of primary aluminium produced by Rusal stood at 1913 tonnes, reflecting a Y-o-Y growth of 22 per cent from 1,891 tonnes.
In the first half of 2023, sales of primary aluminium and alloys decreased by US$1,093 million, or 18.4 per cent, to US$4,839 million compared to US$5,932 million in the first half of 2022. This decrease was mainly due to a 25.7 per cent decrease in the average price per tonne of aluminium, which went from US$3,365 per tonne in the first half of 2022 to US$2,501 per tonne in the first half of 2023. This decrease was driven by a decrease in the LME aluminium price, from US$3,075 per tonne in the first half of 2022 to US$2,331 per tonne in the first half of 2023. However, this decrease in revenue was partially offset by a 9.8 per cent increase in the sales volume of primary aluminium and alloys.
As per the data, in the initial half of 2023, the net profit attributable to the owners of Rio Tinto amounted to $5.1 billion, marking a decrease from $8.9 billion in the corresponding period of 2022. The total amount of primary aluminium produced by the company during 2023 stood at 3.2 million tonnes, representing a Y-o-Y growth of 9 per cent.
Specifically, the recorded profit after tax for the first half of 2023 was $4.9 billion, compared to $9.4 billion in 2022. Within this, a loss of $0.2 billion was attributed to non-controlling interests in the first half of 2023, as opposed to a profit of $0.5 billion in the first half of 2022.
Rio Tinto's total revenue for 2023 stood at US$26,667 million. From July to September 2023, the business reported that its aluminium output amounted to 828,000 tonnes, a 2 per cent increase Q-o-Q and a 9 per cent increase Y-o-Y, owing to entire capacity operations at Kitimat smelter and completed cell recovery work at Boyne smelter. Other smelters also displayed consistent operations, which resulted in increased aluminium output. Rio Tinto's total aluminium output in the first nine months of the year was 2.43 million tonnes, a 9 per cent increase year on year.
The financial report for the fourth quarter of 2023 highlights Rio Tinto's outstanding operational performance. Additionally, aluminium production surged by 9 per cent, totalling 3.3 million tonnes. This significant growth is attributed to the full-scale resumption of operations at Rio Tinto's Kitimat aluminium smelter and the successful completion of a cell recovery initiative at Boyne.
Emirates Global Aluminium (EGA) reported robust financial results for the first half of 2023, showcasing resilience and strategic foresight in navigating dynamic market conditions. During this period, EGA reported adjusted Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) of AED 4.2 billion (US$1.1 billion), a commendable achievement considering the market's moderation in contrast to the significant volatility experienced in the previous year. This figure marks a decline from AED 7.6 billion (US$2.1 billion) in the first half 2022.
The net profit for H1 2023 reached AED 2.0 billion (US$533 million), reflecting a decrease from AED 5.9 billion (US$1.6 billion) in H1 2022. Similarly, revenue reduced to AED 14.8 billion (US$4 billion) from AED 18.3 billion (US$5 billion) in the first half of 2022. Despite market fluctuations, EGA maintained a competitive edge, with the EBITDA margin of its aluminium segment standing at 27 per cent, albeit lower than the 41 per cent recorded in H1 2022.
Conclusion
The global aluminium market is poised for significant growth between 2023 and 2030. Sustainable materials are in high demand, and regulators are pushing for a shift towards a circular economy, so companies have to find more sustainable, durable, and easily recyclable materials. A lightweight and robust material with endless recyclability, aluminium emerges as the leading sustainable material.
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