June 17 – “Europe braces itself for another aluminium premium hike,” Metal Bulletin
European aluminium market participants are preparing for a last increase in premiums ahead of the summer slowdown, with producers, traders and consumers all forecasting higher premiums over the next few weeks. Metal Bulletin’s European duty-paid aluminium premium stands at $405-435 per tonne, while the duty-unpaid premium is at $330-355 per tonne. Both are all-time record highs, and neither has anyone calling for a decrease. “We’re at [a duty-paid premium of] $435 on our way to $440, and it will be $450 by the end of the month,” a trader said. “There will be one more push to mid-July and then it will settle.”
June 26 – “Brazilian aluminium premiums flat on sluggish demand,” Metal Bulletin
June 26 – “LME OFFICIALS: Aluminium back below $1,900 as activity slows,” Metal Bulletin
July 2 – “Alcoa tells U.S. SEC that warehousing reforms could hit premiums,” Reuters
In a reply to queries from the U.S. Securities and Exchange Commission, Alcoa said warehousing reforms could push more aluminum onto the physical market, weighing down the premiums paid by users who take physical delivery of the metal. It added that it would in future raise the number of the risk factors disclosed in its filings.
“Decreases in regional delivery and product premiums, decreases in LME aluminum prices and increases in the supply of aluminum could have a material adverse effect on Alcoa’s business, financial condition and results of operations or cash flow,” it said in a sample of the disclosure it plans to include in future filings.
July 8 – “Alcoa sees bigger aluminum deficit on China cutbacks,” Reuters
Alcoa Inc has increased its estimate for the global aluminum market deficit this year due to capacity cuts in China, the world’s No. 1 producer, a senior executive said on Tuesday in a conference call to discuss second-quarter earnings. The U.S. aluminum producer expects demand to outpace supply by 930,000 tonnes this year, up from its previous estimate of 730,000 tonnes, William Oplinger, Executive Vice President and Chief Financial Officer, said.
July 11 – “European secondary Al ingot prices tick up on strong demand, rising LME price,” Metal Bulletin
July 13 – “Demand from US automakers could boost aluminium price – Japan industry body,” Metal Guru
Ford Motor plans to launch a new aluminium intensive truck this year, with speculation that other carmakers could start using more of the metal, which is lighter than steel and helps make vehicles more fuel efficient.
Mr Takashi Ishiyama chairman of the Japan Aluminium Association said that “If automakers follow Ford’s step to use more aluminium, supply of the metal will become short and prices could rise as high as around USD 2,500 per tonne.”
July 14 – “Comex approves aluminium warehouse in Dearborn, Michigan,” Metal Bulletin
Comex has approved Dearborn Distribution Services’ application for storage of aluminium against the Comex aluminium futures contract at the warehouse company’s Dearborn, Michigan, facility, CME Group said in a notice on Friday July 11. The approved cumulative indoor and outdoor capacity at the facility is 50,000 tonnes.
July 16 – “Aluminium hits 13-month high after China data lifts outlook,” Business Recorder
July 17 – “COLUMN – LME vs Rusal (Part 2) will be legal not market drama,” Reuters
The legal battle between the London Metal Exchange (LME) and Russian aluminium giant Rusal will resume on July 29. The LME is appealing a previous British High Court ruling that it failed properly to consult on a proposal for cutting load-out queues at some of its registered warehouse. The rule change, linking load-in and load-out rates, was originally due to come into force in May but has been put on ice after Justice Phillips’ call that the consultation was “legally unfair”.
July 22 – “COLUMN – China aluminium surplus likely to cap price rally,” Reuters, by Clyde Russell
It’s no secret that much of Chinese aluminium smelting capacity operates at a loss and is reliant on subsidies from local and regional governments to survive. But the price gain in the second quarter resulted in capacity that was either idled, or about to be shut, remaining in operation, according to a July 17 report from Beijing-based consultants AZ China. This is despite some 80 percent of Chinese smelters, representing some 20 million tonnes of annual capacity, operating at a theoretical loss, AZ China said.
July 22 – “Aluminum contango sinks to lowest in 18 months on dwindling stocks,” Reuters, by Andy Home
The legal battle between the London Metal Exchange (LME) and Russian aluminium giant Rusal will resume on July 29.
The LME is appealing a previous British High Court ruling that it failed properly to consult on a proposal for cutting load-out queues at some of its registered warehouse. The rule change, linking load-in and load-out rates, was originally due to come into force in May but has been put on ice after Justice Phillips’ call that the consultation was “legally unfair”.
July 23 – “LME approves BTG Pactual to operate warehouses in Singapore,” Reuters
In a notice to members on Tuesday, the LME said it has approved BTG Pactual Commodities Warehousing to store aluminium, aluminium alloy, copper, nickel, lead, tin and zinc in the city state. Singapore marks the third LME location this year for the Sao Paulo headquartered bank, one of the few that is expanding in commodities. Among a string of big hitting commodity hires, BTG Pactual last year took on Shon Loth, a metals warehousing expert formerly with Noble and Pacorini Metals, now owned by Glencore.
July 24 – “LME aluminium to revisit high of $2,054.75,” Business Recorder
July 28 – “Court appeal to move LME closer to cutting warehouse backlogs,” Reuters
The London Metal Exchange (LME) is likely to move quickly to implement its tough warehousing rules to cut backlogs if it is successful at an appeal hearing this week, metals market sources said. But even if it loses the appeal case against Russian aluminium giant Rusal, the rules designed to speed up deliveries of metal from depots in the LME’s global network are likely to come into force by year’s end after another consultation period, the sources said.
At issue are reforms proposed by the LME, originally due to take force in April, to make owners of warehouses deliver out at least as much metal as they take in, but which Rusal fears will unleash supplies onto the market and depress aluminium prices.