Research on the Supply Chain of Aluminum Anti-collision Beams for Automobiles

Research On The Supply Chain Of Aluminum Anti-collision Beams For Automobiles

Aluminum Wire Supplier Screening 

Cost Analysis of AL Extrusion for Target Units

Cost Analysis Of AL Extrusion For Target Units

Research on the Sustainable Development Layout of key Players(Foil, Roll, Plate)

Research On The Sustainable Development Layout Of Key Players(Foil, Roll, Plate)

Optimization of Purchasing Cost for Casting Alloys

Optimization Of Purchasing Cost For Casting Alloys

Home

Metal News

UPDATE: Aluminum Sector In Midst Of Structural Shift-Dubal   

Li-ion Battery Americas 2024

CLNB 2024 9TH CHINA NEW ENERGY EXPO

Indonesia Nickel & Cobalt & EV Industry Conference 2024

ASEAN Tin Industry Conference 2024

ASEAN Coal Industry Conference 2024

ASEAN Aluminium Industry Conference 2024

2024 ASEAN Automotive Supply Chain

2024 Global Renewable Metal Industry Chain Summit

2nd Li-ion Battery Europe 2024

NET ZERO EUROPE - Solar & Energy Storage Summit

India's NALCO Sells 270,000 T Alumina for 2011: Source

BAHRAIN, Sept. 21 -- The aluminum sector is undergoing a period of structural change in terms of where smelters are located similar to that seen in the 1970s, with little room to expand output in Europe, a senior executive at Dubai Aluminum Company said Monday.
In the 1970s, the Japanese primary aluminum industry was closed and production shifted to North and South America, Walid Al Attar, vice president of marketing and sales at Dubal, told Dow Jones Newswires.
Now new smelters are being built in China and the Middle East.
&quot;It makes sense to locate new capacity in regions that offer relatively low power prices,&quot; he said. Most European governments recognize the multiple cost pressures and as a result &quot;there is already a structural shift to non-heavy industry sectors taking place. We do not see much scope for any expansion in output in Europe,&quot; he said.
Energy costs, which account for around a third of total aluminum production costs, remain the main consideration, along with raw materials, environmental and labor costs.
&quot;We estimate somewhere around 20% to 30% of smelting capacity is operating cash negative at an aluminum price of $2,100 a metric ton--much of this in China, with some in Europe and the U.S.,&quot; Al Attar said. &quot;If we get a sustained period of prices below $1,400-$1,500/ton, I think we are likely to see greater producer discipline.&quot;
According to Al Attar, producers have a number of ways to ride out periods of low prices, including changing the product mix, implementing severe cost cuts and renegotiating supply contracts, but that ultimately, &quot;shareholder pressure is likely to force smelters to shut down.&quot;
&quot;In Europe and North America, there continues to be pressure for closure of high power cost capacity and we that this will, in time, lead to closure of high cost capacity,&quot; he said. &quot;So the growth in capacity we are currently seeing (particularly in China) is, in essence, replacement for this high cost capacity,&quot; he said.
Smelters such as Steg, Anglesey and Lannemezan have all closed in recent years due to high energy costs, while the future of Alcoa Inc's (AA) Italian smelters and Norsk Hydro ASA's (NHY.OS) Neuss smelter in Germany is under discussion.
Yet the cost of physically dismantling smelters in Europe and the U.S. &quot;is actually quite high,&quot; Al Attar said, because environmental remedial costs have to be paid to return the land to its former state.
&quot;So in some cases, it's cheaper to keep the smelter in place, but in effect you have permanently shut the plant. Of course, that said, there is always the temptation to bring the smelter back online if the aluminum market tightens sufficiently and prices move significantly higher,&quot; Al Attar told Dow Jones Newswires. He described this as the Lazarus effect, as has been seen in the U.S. where a number of smelters faced unaffordable energy costs.
China, the world's biggest producer and consumer of aluminum, is a different kettle of fish, however. According to Al Attar, the aluminum industry there is complicated, meaning smelters can't all be put into the same bracket.
&quot;For example, there are smelters [in China] that are run in pure economic terms--much like anywhere else in the world,&quot; he said. At the same time, you have a number of smelters that are &quot;price insensitive&quot; and which effectively are part of the social policy of any particular province. These smelters are unlikely to shut down or reduce capacity and are effectively subsidized by local provinces to provide income and employment,&quot; he added.
This doesn't make China a problem, but it does add a different dynamic to the aluminum industry, Al Attar said.
&quot;Let's not forget that, in 2009, it was China that soaked up a lot of surplus metal in the market and provided firm demand growth. Without that, we would have had an even higher level of stocks. China is already closing that inefficient capacity,&quot; he added. Chinese smelters are nonetheless expected to remain at the top-end of the cost curve, he said.
While there is new capacity in China coming on stream it is happening at the same time as inefficient, outdated production capacity is being closed, Al Attar said. &quot;There is also intense pressure on provinces to meet energy reduction targets and we have already seen a significant reduction in output in Henan and Guangxi provinces--and we suspect there is more to come. The net effect could well be that Chinese output growth is modest for the next few years,&quot; he noted.
Longer term, Al Attar said China will have a neutral impact on the aluminum industry. &quot;It certainly doesn't make economic sense for China to be exporting primary aluminum to the rest of the world, given that China has an energy deficit,&quot; he noted. &quot;Also, there is plenty of potential for Chinese internal demand to grow, given still low per capita consumption, so we would also expect [Chinese] aluminum exports in other forms such as extrusions and sheet to fall over time,&quot; he added.
&nbsp;
&nbsp;

NPI Reference Price in China (2010-9-21)

UPDATE: Aluminum Sector In Midst Of Structural Shift-Dubal    | Shanghai Non ferrous Metals

UPDATE: Aluminum Sector In Midst Of Structural Shift-Dubal

SMM Events & Webinars

NET ZERO EUROPE - Solar & Energy Storage Summit

2nd Li-ion Battery Europe 2024

2024 Global Renewable Metal Industry Chain Summit