The US Midwest premium was trading between 18.8–19.4 cents per pound (¢/lb) on Friday, Feb. 9. There remains a host of macroeconomic and geopolitical risks in the current environment, but none have affected the short-term outlook for the premium. Current trading for April reached 20 ¢/lb, which is on par with CRU’s current forecast for Q2’24. Dates closer to the end of the year have fallen to 21.2 ¢/lb.
The trading side of the market has failed to build any significant momentum. Prior to entering 2024, there was a slight contango building but this has decayed week over week (w/w). End of year had been as high as 24 ¢/lb at one point. The lack of end-use demand is still the biggest concern. Despite rolled shipments steadying to start the year, extrusions are still down heavily. The Federal Reserve has not hinted at any near-term relief from high interest rates, which will only continue to stress consumer spending.
Rusal’s exports rise markedly
Russia sent 237,000 metric tons (t) of metal abroad in January – a 30% increase on the year-ago month. Domestic shipments went up 8% to 54,000 t, giving an overall total of 292,000 t and an increase of 26%. UC Rusal’s smelters imported 451,000 t of alumina in January, up 11% year over year (y/y). The figures were reported by Interfax news agency, citing data from Russian Railways.
European Aluminium calls for a “real Industry Decarbonization Deal”
The European Commission unveiled its statement ‘Securing our future: Europe’s 2040 climate target and path to climate neutrality by 2050 building a sustainable, just, and prosperous society,’ outlining the needed climate and energy policy framework post-2030.
The framework recommends a greenhouse-gas (GHG) emissions reduction target of 90% by 2040, compared with 1990 levels. This presents a significant opportunity and challenge for the aluminum industry, as demand is set to surge in support of the green transition. Trade association European Aluminium emphasizes the pressing need for coherent energy, trade, and industrial policies that facilitate the industry’s decarbonization, and incentivizing recycling while remaining competitive on global markets. This will enable the industry to meet the growing demand for sustainable aluminum ‘made in Europe’.
US aluminum producers’ shares fall sharply on talk of new Trump tariffs
In an interview on Sunday, Feb. 4, on Fox News, the likely presidential candidate for the Republican party Donald Trump floated the idea of higher tariffs on Chinese products potentially exceeding the 60% recently reported in the Washington Post. “Maybe it’s going to be more than that,” Trump was quoted as saying.
The news set off a negative reaction in the share prices of aluminum producers on Monday, Feb. 5, with Alcoa falling by 9.0%; Century Aluminum by 5.3%; and Rio Tinto by 2.4%. The falls were attributable partially to the potential tariffs, and also to a broader sell-off in the market.
New recycling process to transform aluminum scrap into building components
The US Department of Energy’s Pacific Northwest National Laboratory (PNNL) in Washington state on Feb. 1 announced that it developed a new process called Shear Assisted Processing and Extrusion Process (ShAPE) that can transform 100% post-consumer aluminum scrap into usable extrusions. The extrusions will meet or exceed stringent ASTM standards for strength and flexibility for common building-grade alloys 6061 and 6063.
Considering the announcement, the PNNL chief scientist Scott Whalen, who led this research, mentioned that “with approximately 55% of the global aluminum extrusion market servicing the building and construction industry, the evolution of ShAPE to include aluminum recycling for building structures is an enormous opportunity for decarbonizing the built environment.”
He added: “We are finding that the unique microstructures within the metal are more tolerant to impurities than previously thought. This enables us to reach even deeper into the aluminum scrap market while maintaining material performance.”
According to the press release, the latest round of patented ShAPE technology prompted technology entrepreneur Eric Donsky to form a start-up manufacturing company. This is with the intention to scale a ShAPE-based process into vertically integrated manufacturing facilities that upcycle scrap aluminum into a portfolio of low-carbon extruded parts, initially targeting the building and construction industry.
This article was first published by CRU. Learn more about CRU’s services at www.crugroup.com/analysis.
Matthew AbramsRead more from Matthew Abrams
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The US Midwest premium was flat week over week (w/w) at 18.8–19.4¢/lb. Again, the premium has exhibited remarkably low levels of volatility and has yet to react to news in the geopolitical or macroeconomic spaces.