Aluminum

Aluminum production

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This morning in metals news: Rio Tinto and Meridian Energy have reached a deal that will allow New Zealand’s Aluminum Smelter to continue operating the Tiwai Point aluminum smelter; BHP unveiled plans to build a new wind fence; and the Energy Information Administration (EIA) forecasts U.S. oil and natural gas production will fall this year.

Rio Tinto, Meridian Energy reach deal on Tiwai Point aluminum smelter

Miner Rio Tinto announced it had reached a deal with Meridian Energy that will allow New Zealand’s Aluminum Smelter to continue operating the Tiwai Point aluminum smelter until 2024.

“The extension provides certainty to employees, the local community and customers while providing more time for all stakeholders to plan for the future,” Rio Tinto said in a release.

The agreement with Meridian helps make the smelter “economically viable and competitive,” Rio Tinto added.

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BHP plans to build wind fence

On Thursday, BHP announced plans to build a wind fence as part of its Pilbara Air Quality Program.

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steel tariff

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This morning in metals news: several industry groups urged President-elect Joe Biden to continue existing steel tariffs and quotas; Germany’s OGE and Thyssenkrupp and Norwegian energy company Equinor are collaborating to mitigate emissions; and Norsk Hydro and Nuvosil are working on aluminum and silicon recycling technology.

Industry groups urge Biden to keep steel tariffs

President Donald Trump in 2018 used Section 232 of the Trade Expansion Act of 1962 to impose steel tariffs of 25%.

The steel tariffs remain in place, as does the 10% tariff on aluminum.

President-elect Joe Biden is set to take office next week. As such, many have wondered how the former vice president’s trade policy will differ from Trump’s approach.

In a joint letter, the American Iron and Steel Institute (AISI), Steel Manufacturers Association (SMA), the United Steelworkers union (USW), The Committee on Pipe and Tube Imports (CPTI) and American Institute of Steel Construction (AISC) urged Biden to keep the steel tariffs in place.

“Continuation of the [steel] tariffs and quotas is essential to ensuring the viability of the domestic steel industry in the face of this massive and growing excess steel capacity,” the statement reads.

The letter adds that removing or weakening the measures will invite a “new surge” in imports.

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OGE, Thyssenkrupp, Equinor work together to curb Duisburg emissions

According to Reuters, German firms OGE and Thyssenkrupp and Norwegian energy company Equinor will work together to curb emissions from Thyssenkrupp’s plant in Duisburg, Germany.

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copper mine

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This morning in metals news: Turquoise Hill Resources offered an update on the Oyu Tolgoi copper mine expansion project; renewable power generation will continue to rise this year in the U.S.; and the aluminum price has traded sideways over the last month.

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Oyu Tolgoi copper mine project in danger

The fate of the Oyu Tolgoi copper mine expansion project is up in the air, as it could face termination from the Mongolian government.

Turquoise Hill Resources, which is majority-owned by miner Rio Tinto, jointly owns the massive project with the Mongolian government. The parties reached a financing plan for the project in 2015.

However, the Mongolian government appears to be concerned about runaway costs for the project.

“In addition, the Government of Mongolia has advised Rio Tinto that it is dissatisfied with the results of the Definitive Estimate, which was completed and delivered by Rio Tinto and publicly announced by the Company on December 18, 2020, and is concerned that the significant increase in the development costs of the Oyu Tolgoi project has eroded the economic benefits it anticipated to receive therefrom,” Turquoise Hill said in a statement. “The Government of Mongolia has indicated that if the Oyu Tolgoi project is not economically beneficial to the country, it would be necessary to review and evaluate whether it can proceed.”

Renewables continue to rise

Renewable sources account for the most new electricity-generating capacity this year, the Energy Information Administration reported.

“According to the U.S. Energy Information Administration’s (EIA) latest inventory of electricity generators, developers and power plant owners plan for 39.7 gigawatts (GW) of new electricity generating capacity to start commercial operation in 2021,” the EIA reported. “Solar will account for the largest share of new capacity at 39%, followed by wind at 31%. About 3% of the new capacity will come from the new nuclear reactor at the Vogtle power plant in Georgia.”

Aluminum trends flat

After surging throughout most of the second half of 2020, the aluminum price has slowed down of late.

The LME three-month aluminum price is up just 0.22% over the last month. The price closed Friday at $2,032 per metric ton.

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aluminum ingot stacked for export

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This month the Aluminum Monthly Metals Index (MMI) remained flat, as the Department of Commerce announced the creation of a new Aluminum Import Monitoring and Analysis system.

January 2021 Aluminum MMI chart

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New Aluminum Import Monitoring system

On Dec. 23, 2020, the U.S. Department of Commerce announced the creation of the Aluminum Import Monitoring and Analysis (AIM) system.

The system, similar to the Steel Import Monitoring and Analysis (SIMA) system, will collect and publish data on aluminum imports into the U.S.

The system will allow users to track trade flows more easily to help spot trends earlier and to provide better guidance to the domestic industry and government. Likewise, better data collection and its analysis should allow domestic producers to compete on a level playing field.

The system is expected to be available on Jan. 25, 2021.

LME aluminum changes

The London Metal Exchange announced its intention to move forward with its sustainability strategy after receiving market feedback. Part of the strategy will include a spot trading platform for price research and trading of low-carbon aluminum for interested buyers and sellers.

As part of this strategy, the LMEpassport, a digital credential register, will be launched to allow greater visibility of carbon sustainability criteria.

The LME will implement it gradually over three years across its physically settled metals requiring Certificates of Analysis (CoAs) and other value-add information to facilitate disclosure under existing standards across metal brands. The service will start in 2021 and will initially focus on aluminum.

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import tariff

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This morning in metals news: the U.S. announced it will adjust its tariffs on E.U. products imposed last year; the U.S.’s renewable energy consumption surpassed that of coal for the first time since before 1885; and metals prices have retraced slightly this week.

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U.S. adjusts tariffs on E.U.

Last year, a WTO ruling authorized the U.S. to impose up to $7.5 billion worth in tariffs on E.U. products. The ruling came as a result of the long-running saga over government subsidies for Airbus in Europe.

Yesterday, the United States Trade Representative (USTR) announced the U.S. will adjust the previously announced tariffs, citing the scope of the E.U.’s countermeasures that hit against U.S. subsidies of Boeing.

“In September, 2020 the EU was authorized to impose tariffs affecting $4 billion in U.S. trade as a result of related WTO litigation,” the USTR said in a release. “In implementing its tariffs, however, the EU used trade data from a period in which trade volumes had been drastically reduced due to the horrific effects on the global economy from the COVID-19 virus.  The result of this choice was that Europe imposed tariffs on substantially more products than would have been covered if it had utilized a normal period.  Although the United States explained to the EU the distortive effect of its selected time period, the EU refused to change its approach.”

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aluminum ingot stacked for export

Olegs/Adobe Stock

As we continue our review of the best of 2020, let’s take a quick look back at the top aluminum stories of the year.

Previously, we reviewed the most-viewed posts of the year overall and the most-viewed steel-centric posts of the year.

Today, we’ll take a look at aluminum, which has also been on the rise in the second half of the year. The LME three-month price bottomed out at $1,460 per metric ton in April. Since then, however, the price has surged, reaching as high as $2,062 per metric ton in early December.

Like steel, prices have continued to rise. Will that trend continue in 2020? That remains to be seen, of course. However, as MetalMiner’s Stuart Burns outlined in October, Goldman Sachs is bullish on commodities in 2021.

Before we turn the page, let’s first take a look back at the best of 2020.

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Best of 2020: top aluminum posts of the year

  1. Trump expands Section 232 tariffs on steel, aluminum derivatives
  2. Aluminum price is pulled this way and that on rising trader interest, supply glut
  3. Aluminum MMI: Demand weakness leads to further price deterioration
  4. China’s aluminum production continues on through COVID-19 crisis
  5. Aluminum MMI: Demand uncertainty weighs on aluminum prices
  6. Aluminum MMI: Aluminum price makes gains, index rises 6.7%
  7. Aluminum MMI: Aluminum price climbs despite overwhelming supply
  8. Aluminum MMI: Aluminum prices continue to receive support
  9. China’s aluminum supply chain trauma on the heels of the coronavirus outbreak
  10. Aluminum MMI: Chinese aluminum demand remains strong, imports surge

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hot-rolled coil steel

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This morning in metals news: U.S. Steel sold the Keystone Industrial Port Complex for $160 million; ArcelorMittal and Nippon Steel will build a new electric arc furnace at their joint venture in Alabama; and, finally, the aluminum price has retraced slightly in December.

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U.S. Steel sells Keystone Industrial Port Complex

U.S. Steel recently announced it has closed on the sale of its Keystone Port Industrial Complex in Fairness Hills, Pennsylvania.

The sales of the “non-core real estate asset” comes for $160 million.

 ArcelorMittal, Nippon Steel to build Alabama EAF

Nippon Steel said it and ArcelorMittal would bring a new electric arc furnace to their joint venture in Calvert, Alabama.

The steelmaker it expects production to begin in the first half of 2023.

The Calvert facility is a 50:50 joint venture of the two firms.

“Calvert currently produces steel sheet products by processing semi-finished products (slabs) procured from domestic and overseas suppliers,” Nippon Steel said in a Dec. 22 announcement. “With the newly-built EAF, Calvert will be able to manufacture by itself part of slabs necessary to produce its steel sheet products and will strive for further strengthening its competitiveness through advantages of the self-manufacture, such as shortening lead time in slab procurement, improving its productivity through utilization of self-manufactured high temperature slabs, and increasing the domestic procurement ratio of slabs.”

Aluminum pulls back

Like many metals, aluminum has been on a steady rise since May.

However, in December, aluminum has pulled back a little bit.

The LME three-month aluminum price remains up 2.2% month over month after closing last week at $2,025 per metric ton. Meanwhile, the metal started the month just north of $2,060 per metric ton.

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imports

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This morning in metals news: U.S. import prices rose slightly in November, according to the Bureau of Labor Statistics; the Pilbara Ports Authority reported November shipping data;  and, finally, there is speculation the U.S. could reimpose sanctions on Russian aluminum giant Rusal, Bloomberg reported.

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Import prices rise in November

Import prices picked up by 0.1% in November, the Bureau of Labor Statistics (BLS) reported.

Higher fuel prices made imports more expensive last month.

“Prices for import fuel increased 4.3 percent in November following a 0.9-percent decline in October and a 4.7-percent drop in September,” the BLS reported. “Higher prices for both natural gas and petroleum contributed to the November advance.”

Meanwhile, export prices gained 0.6% after rising by 0.2% and 0.6% the previous two months.

Pilbara Ports Authority reports November shipping data

Australia’s Pilbara Ports Authority reported November throughput of 57.4 million tonnes, down 3% year over year.

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China is going through a purple patch at the moment, particularly the Chinese aluminum sector.

An early and strong rebound from Q1 lockdowns and significant stimulus investment that has made its way into property and infrastructure activity have boosted demand for all the base metals.

However, aluminum has arguably seen the biggest benefit.

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Chinese aluminum sector sees rising bauxite, alumina imports

A recent post by ING notes China’s strong imports in aluminum-related raw materials — notably bauxite and alumina — continued in the second half.

Bauxite imports in the first 10 months grew by 14% year over year to around 96 million metric tons. Total alumina imports, meanwhile, rose by 205% to 3.1 million tons.

As we reported last month, primary metal imports, while easing now, have been a surprise feature this summer. Total imports in the first 10 months hitting 878 ktons, or 14 times higher than the same period last year, ING reports.

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merger and acquisition

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This morning in metals news: U.S. Steel today announced it will acquire the remaining equity of Big River Steel for $774 million; meanwhile, the U.S. steel sector’s capacity utilization rate for the week ended Dec. 5 reached 71.4%; and, finally, the Aluminum Association recently penned a letter to Secretary of Commerce Wilbur Ross criticizing the Section 232 aluminum exclusion process.

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U.S. Steel to acquire remaining equity of Big River Steel

U.S. Steel announced today it will acquire the remaining equity in Big River Steel for $774 million.

“For months, I’ve said that we can’t get to the future fast enough. Today, I can say the future is now. We are acquiring Big River Steel, the cornerstone of our ‘Best of Both’ strategy,” U.S. Steel President and CEO David B. Burritt said in a release. “With Big River Steel, we can offer customers the high performance, innovative steel products they expect from U. S. Steel’s scientists and application engineers made through a state-of-the-art, environmentally sustainable and efficient mini mill process.”

Steel capacity utilization reaches 71.4%

Meanwhile, the U.S. steel sector posted a capacity utilization rate of 71.4% during the week ended Dec. 5, the American Iron and Steel Institute (AISI) reported.

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