Aluminum
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CRU aluminum news roundup
Written by Marziyeh Horeh
July 12, 2024
Biden toughens measures against Chinese metal imports
President Joe Biden has announced Chinese-made steel and aluminum shipped via Mexico will immediately face import duties of 25% and 10%, respectively. This is to close a loophole in the USMCA free-trade agreement, his administration argues. Previously, steel from Mexico entered the US duty-free. Mexico said the action will complement its own recently imposed tariffs on the metals from some countries and further protect the North American market. The governments worked together to draw up the new measures, which also cover aluminum from Belarus, Iran, and Russia.
“Chinese steel and aluminum entering the US market through Mexico evades tariffs, undermines our investments, and harms American workers in states like Pennsylvania and Ohio,” Lael Brainard, director of the White House’s National Economic Council, was quoted as saying by the New York Times. “When China’s export surges harm our markets, whether directly or via other countries, we will act.”
Liu Pengyu, spokesman for the Chinese embassy in Washington, responded by describing the idea of Chinese overcapacity as a groundless accusation and a political tool used by the US to discredit and suppress the Chinese economy. The protectionist measures would hinder global trade, undermine stability of global supply chains and damage China-US economic and trade relations, he added.
On the other hand, Century Aluminum welcomed the decision. The introduction of the “smelted and cast” provision is an important first step in curbing aluminum transshipments, Century said, and unfair trade from third-party countries entering through Mexico.
Century, in particular, noted that the US has continued to experience a surge of imports from Mexico at below market value. CEO Jesse Gary also said: “We are thankful for President Biden’s continued support for the domestic aluminum industry. Aluminum is a key enabler of the green energy transition and a critical material for emerging green industries and our national defense. Today’s decision helps protect the industry and American workers.”
The Aluminum Extruders Council (AEC) also applauds this decision. Jeff Henderson, AEC president said: “The AEC thanks the Biden administration for its support of the industry.”
He added: “This is a good initial step by the administration to address the unfair trade taking place, on the road to an overall North America smelted and cast requirement in the USMCA.”
Alcoa forecasts a return to profitability
Pittsburgh-based primary aluminum producer Alcoa is predicting its Q2 net income will be between $5 million and $25 million, reversing a year-ago net loss of $102 million and one of $252 million the previous quarter.
“The expected sequential increase was driven primarily by the non-recurrence of a charge of $197 million recorded in the first quarter of 2024 related to the curtailment of the Kwinana refinery,” the company said. Alcoa has closed the alumina refinery in Perth, Western Australia. This is in response to the unit running at a financial loss and 80% of its 2.2-million-metric-ton (mt) per-year capacity due to a natural gas shortage and delay in mining approvals.
The other main factor behind Q2’s anticipated profit is higher alumina and aluminum prices, which are forecast to lift sales revenue to a range of $2.850 billion to $2.925 billion from $2.60 billion in Q1 and $2.68 billion in the year-ago Q2. However, third-party alumina shipments will fall by around 5% on the 2.20 million mt in Q1 primarily due to Kwinana’s closure. In contrast, Alcoa’s deliveries of aluminum are likely to be 7% higher than the 634,000 mt in Q1, thanks to the timing of shipments and restart of a potline at the Warrick smelter in Indiana.
Fatality at Hydro’s joint venture Albras
A contractor passed away following an accident at Hydro’s joint-venture Albras in Brazil on July 9, Hydro reported. The contractor was performing maintenance on an electrolysis cell when the accident happened. An investigation has been initiated alongside with the police force and relevant authorities to further determine the root cause of the incident.
“I am deeply saddened to learn about the fatality at our Albras joint-venture plant. This tragic incident underscores the critical importance of safety in everything we do. Our heartfelt condolences go out to the family and the affected colleagues,” said Eivind Kallevik, president and CEO of Hydro.
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Marziyeh Horeh
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