SPEciAL - ALU-WEB.DE

EcONOMicS
consumption of primary aluminium is
expected to rise 5% this year. This will
be the first year global production and
consumption have declined over the
last 15 years.
Continuing weak demand led to
further growth in inventories and
falling prices. As a result, aluminium
supply will surpass consumption by
at least 1.65m tonnes over this year
and about 1.4m tonnes in 2010, while
a market deficit is not expected before
the second half of 2012.
The average aluminium cash
price for ten months this year was
USD1,585 per tonne, while the average
for the year is expected to be about
USD1,625 per tonne. LME aluminium
stocks at the end of October were flat,
at 4.56m tonnes, maintaining the level
since August.
Supply and demand
Aluminium production in China rose
to over 14m tonnes on a y/y basis in
the last two months, while production
in the Western world remained
flat. Smelter production is stable in
the Persian Gulf region, such as Dubal
and Alba. Sohar Aluminium’s new
smelter in Oman reached its first-stage
capacity of 350,000 tpy in the second
quarter. Moreover, Qatar Aluminium’s
50-50 joint venture with Norwegian
Norsk Hydro and state-owned
Qatar Petroleum, with its capacity of
585,000 tpy, will commence production
in December 2009.
Source: Bloomberg, IAI, Alcoa
Western world (excluding China)
unwrought aluminium stocks fell to
1.19m tonnes in September, compared
with a revised 1.24m in August
and 1.65m tonnes in September 2008,
according to provisional IAI figures.
Total aluminium smelter stocks excluding
finished end-products fell to
2.27m tonnes at the end of September,
compared with a revised 2.31m in
August (apart of LME stocks, currently
at 4.56m tonnes).
Extrusion plants worldwide see
few signs of an increase in demand before
2010. The extrusion market has
been on a slide for 18 months, according
to Metal Bulletin. Automotive demand
is likely to drop back as stimulus
programmes come to an end and construction
is still depressed. Aerospace
is on a medium-term downward trend
with little expectation of a return to
growth before 2012.
Alcoa’s shipments of flat-rolled
products rose 6% in the third quarter
compared to the second quarter,
whilst there was an increase in destocking
activity. Alcoa expects an
11% increase of global demand in the
second half of this year.
Norsk Hydro said that demand for
aluminium rolled products is improving
in Europe but third quarter sales
volumes were about 10 to 15% lower
than in the same period of 2008. During
the first half of 2009, sales of aluminium
rolled products were down
around 25% y/y in Europe, meaning
that the industry has partly recovered
in the third quarter, but not to year
2007 levels.
Premiums and warrants
A shortage of aluminium in the Adriatic
and Black sea pushed premiums
up to USD145 per tonne at the end
of October, according to Metal Bulletin.
Spot premiums in Western Europe
were unchanged, for duty-paid
at USD75-80 per tonne, as consumer
restocking eases and with fewer deals
concluded. According to the AMM,
spot-aluminium billet premiums have
risen in Europe by more than USD10
per tonne in a tight market. Previously,
billet premiums had increased
to a range of USD330-340 per tonne
in-warehouse, from USD300-330. European
traders put the spot market at
USD350-360 on a CIF basis.
The US Midwest prompt aluminium
premium over LME cash prices
was between 5.5 and 5.7 cents in the
last week of October, steady to mildly
higher than at the beginning of the
month.
The premium in Japan, a benchmark
for buyers in Asia, has climbed
to USD115 per tonne over the LME
cash price in Q4, on a CIF basis. Japan,
Asia’s largest aluminium importer,
agreed to increase the fee it
pays to producers by at least 53%, to
the highest in 14 years, as surging Chinese
demand eats into regional supplies.
That would be the highest level
since Japan began purchasing in 1996,
18 ALUMINIUM · 12/2009