Upstream Aluminium Weekly Recap: Capesize rates soar above $30,000 per day as bauxite demand fuels shipping boom
This week, notable developments have surfaced in the upstream aluminium sector, covering bauxite, alumina, and primary aluminium. Capesize rates have surged above $30,000 per day, driven notably by unprecedented bauxite shipments from West Africa to China. The sector has seen substantial growth in the first five months of 2024 compared to the same period last year, fuelling increased demand for bauxite and aluminium. However, China's record primary aluminium production in May has impacted the alumina market, the primary raw material for aluminium production, leading to supply constraints and volatile ore prices. China achieved a historic milestone with primary aluminium production reaching a record 3.65 million tonnes. Metro Mining Limited also reported a new shipment record for Q2 of the calendar year, shipping 1.42 million WMT (wet metric tonnes), marking a 12 per cent increase from Q2 2023.
Capesize rates have recently surged past the $30,000-a-day mark, driven by record-breaking bauxite shipments from West Africa to China. Bauxite, the primary source of aluminium, is a significant minor bulk commodity typically transported on Capesize vessels. According to the US Geological Survey, Guinea holds the world's largest bauxite reserves. In the second quarter of this year, Greek broker Intermodal reported an "unprecedented surge" in bauxite exports from Guinea, setting a new record, with most of these exports destined for China.
To know more: https://www.alcircle.com/news/chinas-demand-for-guinea-bauxite-fuels-capesize-market-surge-111342
In May 2024, China achieved a historic milestone in primary aluminium production, hitting a record of 3.65 million tonnes. This output rivals levels seen in August and September of the previous year, driven by the reopening of smelters in Yunnan following an extended shutdown. The country is poised to reach an annual production target of 43 million tonnes. However, this surge has had a notable impact on the alumina market, the primary raw material for aluminium production, causing supply constraints and price fluctuations in ore.
Metro Mining Limited announced a new shipment record for the second quarter of the calendar year, achieving 1.42 million WMT (wet metric tonnes). This marks a 12 per cent increase compared to Q2 2023. Year to date, total shipments have reached 1.50 million WMT. Moreover, Q2 2024 saw the successful commissioning phase of the company's new expansion project, targeting 7 million WMT per annum.
To know more: https://www.alcircle.com/news/q2-milestone-metro-mining-hits-new-shipment-record-ramps-up-expansion-111345
CSI Mining Services, a subsidiary of Mineral Resources Limited (MinRes), begun transporting bauxite ore for Rio Tinto's Weipa operations in northern Queensland. Known for its expertise in comprehensive pit-to-ship solutions, CSI Mining Services excels in advanced crushing, screening, and processing operations for top-tier mining clients, including MinRes.
To know more: https://www.alcircle.com/news/csi-mining-services-begins-transporting-bauxite-for-rio-tinto-s-weipa-operations-111308
Chinalco Shandong was recently honoured in the 2023 Science and Technology Award by the China Environmental Protection Federation for its advancements in the comprehensive red mud utilisation project titled "Green Technology and Engineering Demonstration of Efficient Production of New Powder Materials by Bayer Process Red Mud."
On June 15th, over 30 employees from the SMB-Winning Consortium in Guinea commenced a comprehensive study and exchange program at China Hongqiao Group. The visit started with a warm reception from Guo Cuihua, the Director of Human Resources at China Hongqiao. She warmly highlighted the importance of the delegation's visit, likening it to a reunion. Guo underscored the strong partnership between the two entities and expressed optimism about the opportunities for enhanced collaboration and mutual growth.
To know more: https://www.alcircle.com/news/china-hongqiao-welcomes-smb-winning-consortium-staff-for-comprehensive-study-tour-111313
Singapore-based Winning International Group, a renowned Chinese Capesize specialist, is set to enhance its seaborne trade from West Africa to China with a significant new order. The company had commissioned six very large ore carriers (VLOCs) at an estimated total cost of nearly $700 million, a substantial investment that underscores their commitment to the industry.
To know more: https://www.alcircle.com/news/top-bauxite-carrier-winning-international-invests-in-new-for-west-africa-china-trade-111353
Vedanta Aluminium's commitment to energy conservation and environmental stewardship at its Lanjigarh alumina refinery was honoured with prestigious honours from the Kalinga Awards: Environment. India's leading aluminium producer was awarded two awards—the Kalinga Energy Excellence Award and the Kalinga Environment Excellence Award. These accolades were conferred by the Institute of Quality and Environment Management (IQEMS) in collaboration with the Odisha State Pollution Control Board and the Institute of Public Enterprise (IPE), Hyderabad.
Chinalco Shandong was honoured with the top prize in the 2023 Science and Technology Awards of the China Environmental Protection Federation for its outstanding scientific and technological advancements in the "Green Technology and Engineering Demonstration of Efficient Production of New Powder Materials by Bayer Process Red Mud," a pioneering project in comprehensive red mud utilisation.
The world's alumina production once again crossed the 12 million tonnes level in May 2024 (31 calendar days), close to the output in March 2024, reflecting a month-on-month increase of 2.43 per cent. During the same period last year, the world's alumina output was also above 12 million tonnes but slightly less than this year, showing a marginal difference of 0.19 per cent.
To know more: https://www.alcircle.com/news/world-alumina-production-exceeds-12-mt-level-in-may-amid-dampened-output-in-oceania-111354
China's A00 aluminium ingot price opened the week (July 1, Monday) with a dip of RMB 40 per tonne, marking a sustained downward trend in primary metal prices within the Chinese domestic market. This decline was mainly due to the traditional off-season in manufacturing sectors, leading to reduced aluminium consumption by downstream plants. However, from July 2 to July 4, the SMM aluminium ingot prices showed upward movement owing to the central bank's monetary policy, and the week closed with a fall of RMB 110 per tonne to clock at RMB 20,270 per tonne. The fluctuations in China's aluminium market, as seen in recent price movements, are influenced by a multifaceted mix of global demand-supply dynamics, regional variations, stable raw material expenses, economic policies, investments in renewable energy, and market speculation.
On Thursday, July 4, both LME aluminium cash bid price and LME aluminium official settlement price went up by US$6 per tonne or 0.24 per cent and US$6.5 per tonne or 0.26 per cent to settle at US$2,492.50 per tonne and US$2,493.50 per tonne. As per the LME price graph, 3-month bid price and 3-month offer price increased by US$4 per tonne or 0.15 per cent and US$4.5 per tonne or 0.17 per cent to settle at US$2,540 per tonne and US$2,541 per tonne.
To know more: https://www.alcircle.com/news/lme-aluminium-benchmark-price-moves-up-to-us2493-50-t-shfe-price-drops-by-us19-t-111352
Aluminium demand in North America is rising, driven by the automotive, aerospace, construction, and packaging industries' increasing emphasis on sustainability. The region's aluminium sector is characterised by various product types like flat-rolled products, castings, extrusions, and forgings, which cater to industries including transportation, consumer goods, machinery and equipment, and construction.
According to recent reports, Japanese aluminium buyers agreed to an 8 per cent lower premium for Q3 2024 shipments than the previous quarter, ending September 30. This decision follows discussions involving five directly involved sources in quarterly pricing talks. Global producers' latest offer for Q3 ranged from $185 to $190 per tonne, marking a significant decrease of 36-37 per cent, with the current premium settling at $118 to $119 per tonne.
To know more: https://www.alcircle.com/news/japanese-aluminium-buyers-conclude-q3-premium-negotiations-with-8-reduction-111351
The Talum, InovaIT, and Comland consortium unlocked a breakthrough with the completion of the ambitious two-year project Aluminij 4.0. This project aims to revolutionise aluminium production and marks a new era for Talum by integrating advanced technologies such as the Industrial Internet of Things (IIoT), Robotics, Artificial Intelligence (AI), and Automation.
To know more: https://www.alcircle.com/news/aluminij-4-0-talum-s-visionary-leap-into-the-digital-revolution-111346
Tomago Aluminium, Australasia’s largest aluminium smelter, appointed Jérôme Dozol as its new Chief Executive Officer (CEO) and General Manager. Dozol aims to steer the company into its next phase of growth and sustainability. With over 18 years at Rio Tinto, a major stakeholder in Tomago Aluminium, Dozol brings extensive experience to his new role.
To know more: https://www.alcircle.com/news/tomago-aluminium-names-jerome-dozol-as-chief-executive-officer-111316
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