Upstream aluminium recap: China’s ingot price stabilises this week; SMM’s take on export tax rebate cancellation stands out
The final month of 2024 began this week, marking several key events in the upstream aluminium sector. A few of them are critical minerals export ban by China to the United States, projections by the Australian Securities Exchange Limited (ASX) suggesting a return of bauxite stocks to IPOs, and the stabilisation of primary aluminium ingot price in the Chinese metals market.
After multiple ups and downs through November 2024, China’s domestic primary aluminium ingot price has remained range-bound this week (December 2 to 6) between RMB 20,380 and 20,400 per tonne. During the same period of the previous month, China’s aluminium ingot price experienced a sharp growth of 4.48 per cent from RMB 20,780 per tonne to RMB 21,710 per tonne. In contrast, the price in early December marked an increase of only RMB 20 per tonne.
On December 3, 2024, China banned the exports of three critical minerals - gallium, germanium, and antimony to the United States in the background of escalated trade tensions. The decision came just a day after Washington imposed new restrictions targeting China’s semiconductor sector, signalling an intensifying rivalry between the world’s two largest economies.
To know more: https://www.alcircle.com/news/chinas-critical-minerals-ban-a-new-front-in-usa-china-trade-conflict-112719
The ongoing surges of bauxite prices led Lowell Resources Fund's chief investment officer, John Forwood, to project attention recovery on bauxite stocks at the Australian Securities Exchange Limited (ASX), as some of the bauxite mining companies have yielded high benefits of skyrocketing bauxite prices, regaining stock prices. For instance, Metro Mining, the $350 million capped company has seen a share lift of 215 per cent through the year, with realised pricing up 14 per cent Y-o-Y at 7 million tonnes per annum Bauxite Hills project near Weipa.
Amid many companies taking pledges to improve bauxite mining in Ghana, the Presidential candidate from the National Democratic Congress, John Dramani Mahama, has assured Nyinahin residents, a district in the Ashanti Region, that he would prioritise bauxite mining if elected in the December 7 elections. While addressing the crowd, Mahama outlined a detailed plan to enhance bauxite mining to create local jobs and drive national economic growth.
Alongside Ghana, Indonesia is also eyeing to tap into its bauxite reserves to become a major player in the industry. Through a strategic partnership with China, Indonesia wants to become an integrated upstream and downstream aluminium producer, from bauxite to billet. Indonesia's bauxite reserves currently stand at an impressive 1 billion tonnes, making it an attractive destination for aluminium producers. In addition, Indonesia also aims to produce 600,000 EVs by 2030 and has already partnered with four Chinese EV companies - Neta, Wuling, Chery, and Sokon.
To know more: https://www.alcircle.com/news/indonesia-s-strategic-move-from-bauxite-to-billets-a-vertical-integration-play-is-on-112722
AL Circle found this week from the International Aluminium Institute that South America’s alumina production in October 2024 reached this year’s peak, marking a month-on-month hike of 9.3 per cent and a year-on-year increase of 5.52 per cent. The daily average output also rose in October, marking a month-on-month increase of 5.83 per cent from 32,600 tonnes and a year-on-year rise of 5.5 per cent from 32,700 tonnes.
To know more: https://www.alcircle.com/news/south-americas-alumina-production-hits-ytd-high-with-m-o-m-increase-of-9-3-112723
Primary aluminium production in Africa also grew during October by 2.24 per cent M-o-M amid daily average output shortfall of 100 tonnes. However, compared to the same period of the previous year, Africa’s both monthly and daily production of primary aluminium stood restrained, totalling 137,000 tonnes and 4,400 tonnes.
To know more: https://www.alcircle.com/news/africas-primary-aluminium-production-in-october-shows-growth-amid-daily-output-shortfall-112703
Amid various reactions regarding the impact of China's export tax rebate cancellation, SMM's optimistic outlook for China's domestic aluminium plate, sheet, strip, and foil industry has provided a welcome sense of relief. According to SMM calculation, a 13 per cent tariff rebate cancellation will increase the average export cost per tonne by approximately $397-$471. The increased export cost will boost the profit margin of enterprises, necessitating an increase in processing fees.
Canada’s Parliamentary Budget Officer (PBO), Yves Giroux, estimates that federal revenues will rise by $473 million over five years due to tariffs on Chinese electric vehicles, aluminium, and steel. A 100 per cent tariff on Chinese-made electric vehicles (EVs) and a 25 per cent per cent tariff on aluminium and steel imports were imposed the federal government in October.
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