Though recently MetalMiner has covered many aspects of the aluminum market, we often encourage alternative points of view in particular, alternative global points of view. A frequent commentator on this site, Paul Adkins, has one such alternative point of view regarding some of the happenings within the Chinese aluminum market. Paul should know because he lives in Beijing and works closely with several aluminum producers within China. He also writes the blog Black China Blog and runs the company AZ China. If you seek alternative viewpoints within the aluminum industry in China, you need go no further. Paul Adkins is your man. Paul has taken an alternative point of view on the subject of China aluminum industry output reductions in order to drive down energy intensity. In a recent post on that very subject, Paul explains the Chinese aluminum industry likes to perpetuate that story, “According to our sources, the industry is delighted that the world’s press publish stories about capacity limitations and import growth. Their view is that these things only help promote the metal price, which is why the industry is putting these stories out in the first place.
He’s not kidding. According to his latest monthly report, he sees fourth quarter China aluminum prices reaching $2500/ton (for what it’s worth, the LME closed on the 26th at $2242/ton). But overall, Paul sees the aluminum market within China very much in balance (though he concedes the Strategic Reserves Board has recently sold some of its holdings and inventory levels have dropped). Furthermore, he makes the distinction between China being a net importer of “primary aluminum vs “scrap imports. China is already a net importer, according to Paul, of scrap (and they will pay more for it given the country’s relative high energy costs).
Paul also reports that coke prices have started to increase as a result of rising oil prices and this will impact downstream markets. The combination of coke price increases and some smelter cutbacks could lead producers to turn toward export markets “that have a better capacity to pay.
If your company buys aluminum from China, you may wish to attend a special session of the Metals Society annual conference in San Diego from Feb 27 March 4 entitled, “China Aluminum Briefing led by Paul Adkins. That briefing will be held on Saturday February 26 at the Marriott Hotel. More information can be found at the AZ China website. In addition, the China Aluminum Briefing will feature a discussion of China’s aluminum imports with our friends from Harbor Aluminum, Mr. Jorge Vasquez.
Another exciting speaker who may join the conference includes Mr. John Garnaut (MetalMiner readers may know of John Garnaut who broke the now-famous Stern Hu Rio Tinto story last year when Mr. Hu famously said to Mr. Garnaut on the phone, ” I better hang up, I think my phone is being tapped.) Not one to shun controversy or public debate, Paul included a link to this article by John Garnaut that will sit well with anyone who feels China’s export trade policies are in need of an overhaul.
Additional speakers will cover the bauxite, alumina and coke markets and Paul will also address the aluminum fluoride market.