Upstream Aluminium Weekly Recap: China sets new record for aluminium production with 3.67 million tonnes in June
Aluminium is an essential component of the global economy, and this week, the upstream sector witnessed some significant events. To begin with, China, a dominant force in the global aluminium market, has once again demonstrated its leadership. As per the data from the National Bureau of Statistics (NBS), in June, China churned out a staggering 3.67 million tonnes of primary aluminium, marking a 6.2 per cent surge Y-o-Y. Also, the ongoing demand-production gap reflected a bearish trend in China's A00 aluminium ingot price. Apart from this, AL Circle launched the 25th edition of its e-Magazine titled "Advanced Industrial Technologies in the Aluminium Industry". This landmark issue explores the latest innovations and transformative technologies revolutionising the aluminium sector worldwide. For a detailed overview of the week's industry events, read below:
According to data from the National Bureau of Statistics (NBS), China's primary aluminium production reached its highest level in nearly a decade this June. The first half of the year (H1) saw a 7 per cent increase as producers ramped up output amid rising profits. China, a dominant force in the global aluminium market, reaffirmed its leadership by producing an impressive 3.67 million tonnes of primary aluminium in June. This represents a 6.2 per cent year-on-year increase and sets a new record for the highest monthly production since November 2014, as reported by Reuters.
To know more: https://www.alcircle.com/news/chinas-june-aluminium-output-hits-decade-high-h1-production-grows-by-7-111425
According to the Shanghai Metals Market survey, China’s social inventory of aluminium ingots increased by 8,000 tonnes week-on-week and 10,000 tonnes from July 15, reaching 797,000 tonnes on July 18, of which the amount for sale stood at 671,000. Following the restocking mid-week, the current aluminium ingot inventory has reached a new high for H2, up 243,000 tonnes year-on-year. The incessant increase in inventory since early July, due to a production surge in May and June and weak demand due to the ongoing traditional off-season, has been exerting pressure on domestic prices, bringing them below the RMB 20,000 per tonne level.
In its 25th edition of e-Magazine, AL Circle proudly presents "Advanced Industrial Technologies in the Aluminium Industry". This milestone edition promises to delve deeper into the cutting-edge innovations and transformative technologies reshaping the aluminium sector globally. For industry professionals seeking to navigate the complexities of modern aluminium technologies, AL Circle's e-Magazine "Advanced Industrial Technologies in the Aluminium Industry" remains an invaluable source of information. This edition underscores our commitment to showcasing innovations that drive sustainability, efficiency, and excellence across the aluminium value chain.
On July 16, 2024, Rio Tinto announced its second-quarter production results, highlighting growth in its aluminium and bauxite operations. According to the quarterly report, aluminium production in Q2 reached 824,000 tonnes, marking a 1 per cent year-on-year increase due to stable performance across all its smelters. This steady growth in Q2 contributed to a 3 per cent rise in Rio's total aluminium output over the first six months, bringing the total to 1.65 million tonnes.
Hong Leong Investment Bank (HLIB) expects Press Metal Aluminium Holdings Bhd’s core earnings to increase by up to 20 per cent quarter-on-quarter and 60 per cent year-on-year in the second quarter of 2024, driven by higher aluminium prices. According to HLIB’s projection, the company’s Q2 earnings will range between RM480 million and RM500 million, resulting in a 51 per cent increase in first-half earnings, estimated between RM897 million and RM917 million.
In May 2024, upstream aluminium production, including primary metal and alumina, increased across Europe due to higher profitability driven by rising aluminium prices. Throughout May, the aluminium benchmark price on the London Metal Exchange rose by 5.19 per cent, reaching US$2,677 per tonne from US$2,545 per tonne on April 30. According to the International Aluminium Institute, primary aluminium production saw a notable month-on-month increase in both Western & Central Europe and Russia & Eastern Europe.
Brazil has reclaimed its position as a top-ten player in the global aluminium industry by ramping up primary aluminium production and raw materials. Once ranked as the world's sixth-largest aluminium producer, Brazil had slipped to 12th place in 2022. However, the country's aluminium industry demonstrated a strong resurgence in the following year, driven by advanced strategies and transformative operational initiatives.
According to a Reuters update, some Japanese aluminium buyers have agreed to a 45 per cent higher shipment premium for the July-September quarter than the previous agreement. In early July, these buyers settled on a premium of $118-119 per tonne for third-quarter shipments, which is 36 to 37 per cent lower than the $185-190 per tonne premium some global producers offer for Q3.
To know more: https://www.alcircle.com/news/japanese-aluminium-buyers-recently-agreed-to-pay-premium-above-170-t-for-q3-shipments-111485
Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside of oil and gas, announced the graduation of 45 young UAE National Graduate Trainees from its LEAP talent accelerator programme. LEAP is a comprehensive 12-month programme designed exclusively for EGA Graduate Trainees, offering a tailored learning journey to enhance management and leadership skills. The programme includes mentorship from senior EGA leaders, interactive workshops, simulations, individual coaching, and networking opportunities.
On July 15, World Youth Skills Day, Vedanta Aluminium, India’s largest aluminium producer, reaffirmed its commitment to youth empowerment by announcing the expansion of its skill development initiatives across its locations. These programs aim to enhance the skillsets of rural youth, transitioning them from unskilled to semi-skilled categories through placement-linked training programs. To achieve this, the company has partnered with esteemed training institutions such as the National Bank for Agriculture and Rural Development (NABARD), the Odisha Skill Development Authority (OSDA), and the Skill Development Institute (SDI), among others.
The aluminium associations from the United States, Europe, Canada, and Japan have endorsed a new report by the Organisation for Economic Co-operation and Development (OECD) titled "Quantifying the Role of State Enterprises in Industrial Subsidies." The report emphasizes that while state ownership itself is not necessarily an issue, significant evidence shows that industrial subsidies, such as below-market financing, tend to increase with greater state ownership. Furthermore, state enterprises are more likely to benefit from preferential treatment in competition rules, public procurement practices, and enforced technology transfers.
To know more: https://www.alcircle.com/news/global-aluminium-associations-approves-new-oecd-report-on-state-enterprises-subsidies-111480
On July 16, 2024, Alcoa Corporation announced the preliminary results from its Special Meeting of Stockholders, where shareholders approved the issuance of shares related to the proposed acquisition of Alumina Limited ("Alumina") through a scheme of arrangement ("Scheme"). Approximately 99 per cent of Alcoa shares represented at the meeting voted in favour of the share issuance for the transaction. The final voting results will be reported in a Form 8-K, which the company will file with the U.S. Securities and Exchange Commission within four business days.
At the opening ceremony of the JBI International Workshop on Bauxite Residue and Red Mud Disposal Legacy Issues, held at the ROK Hotel in downtown Kingston on July 15, Hon. Frank Witter, Jamaican Minister of State for the Ministry of Agriculture, Fisheries, and Mining, highlighted the essential role of the Jamaica Bauxite Institute (JBI) in researching and managing bauxite residue. Witter praised the institute's significant efforts in addressing the environmental challenges related to bauxite mining and its contributions to effective governance in this area.
To know more: https://www.alcircle.com/news/jamaica-bauxite-institute-plays-a-crucial-in-bauxite-residue-management-minister-111449
In June 2024, China's output of metallurgical-grade alumina decreased by 2.1 per cent month-on-month, totalling 6.842 million tonnes compared to 6.989 million tonnes in May. However, on a year-on-year basis, production in June 2024 increased by 5.91 per cent from 6.46 million tonnes, according to the Shanghai Metals Market survey. The average daily output for June 2024 was 228,100 tonnes, down by 4,900 tonnes from 233,000 tonnes in May but up by 13,100 tonnes from 215,000 tonnes in June 2023. For the first half of 2024, China's total alumina output reached 40.293 million tonnes, marking a 3.84 per cent year-on-year increase.
Indonesia’s Ministry of Energy and Mineral Resources (ESDM) indicated that some restrictions on bauxite ore exports might be eased, according to statements from ministry spokesperson Agus Cahyono Adi. This potential policy change follows discussions between ESDM Minister Arifin Tasrif and Commission VII of the House of Representatives (DPR) members regarding possible relaxations to existing export regulations.
To know more: https://www.alcircle.com/news/indonesias-ministry-of-energy-and-mineral-resources-talks-about-bauxite-export-relaxation-111426
The United States has begun discussions with Indonesia about joining a multinational partnership to enhance Southeast Asian environmental standards. Jose Fernandez, the U.S. Under Secretary of State for Economic Growth, Energy, and the Environment, unveiled this proposal during his recent diplomatic visit to Jakarta. The Mineral Security Partnership (MSP), which includes 14 countries and the European Union, seeks to accelerate the development of sustainable supply chains for critical minerals through financial and diplomatic support.
To know more: https://www.alcircle.com/news/critical-minerals-deal-u-s-approaches-indonesia-for-environmental-collaboration-111435
At this week’s Noosa Mining Investment Conference in Queensland, Australian mining and exploration company Metro Mining will highlight the ongoing progress at its Bauxite Hills Mine, located north of Weipa. Since beginning operations at the vast 1,900 km² project in April 2018, Metro Mining quickly exported 2 million tonnes of bauxite to five major Chinese companies within its first year.
To know more: https://www.alcircle.com/news/metro-mining-to-highlight-successes-and-plans-at-the-noosa-investment-meet-111441
The Government of Ghana, via the Ministry of Lands and Natural Resources, has submitted mining lease agreements for bauxite and lithium to Parliament for review. The Ministry presented a lease agreement with Ashanti Bauxite Limited for bauxite mining in the Nyinahini Block 2 Area in the Atwima Mponua District of the Ashanti Region. A lease agreement with Barari DV Ghana Limited was also proposed for lithium exploration at Ewoyaa in the Central Region.
To know more: https://www.alcircle.com/news/ghana-s-bauxite-and-lithium-prospects-government-tables-mining-leases-in-parliament-111463
In May 2024, China's bauxite imports declined to below 14 million tonnes after peaking in April. According to customs data, China imported 13.549 million tonnes in May, marking a 4.84 per cent decrease from 14.237 million tonnes in April and a 4.63 per cent year-on-year drop. This reduction follows two consecutive months of increasing imports. For the first five months of 2024, China's total bauxite imports reached 64.128 million tonnes, showing a slight increase compared to the same period in the previous year.
To know more: https://www.alcircle.com/news/disrupted-shipments-from-guinea-cause-sharp-reversal-in-china-s-may-2024-bauxite-imports-111437
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