CRU aluminum news roundup

The adjusted EBITDA for Hydro’s primary metal division was at NOK2.520 billion, down 21.6% y/y but up 28.2% q/q. Results were down driven by lower contribution from power sales, increased alumina and energy cost, and inflation on fixed cost, partly offset by reduced carbon cost.

Primary production came in at 507,000 metric tons (mt), broadly stable both y/y and q/q. Sales of 584,000 t both improved q/q (+44,000 mt) and y/y (+7,000 mt). The all-in price, including the premium, was up $13/mt from last quarter at $2,742/mt and up $136/mt from last year. The implied all-in primary cost was also up $50/mt from last quarter at $2,300/mt and up $75/mt from last year.

Hydro said it expected higher raw material cost as well as lower sales volumes for 2024 Q3. It also said it had around 63% of its primary production for Q3 priced at $2,432/mt and 42% of premiums booked at $494/mt.

Hydro’s results for its extrusions segment were lower both y/y and q/q. The adjusted EBITDA of NOK1.377 billion was down 31.5% y/y and down 4.1% q/q. Hydro said its results were down on lower sales volumes, lower recycling margins, higher costs, and currency effects. That was partly offset by strong sales margins and strict cost measures.

As for its end-use markets, sales in automotive were down 14% y/y and sales to transport were down as much as 24% y/y. Meanwhile, sales to building and construction (B&C) (32% of total sales) continued to be weak, but were down only 2% y/y. As for its outlook for Q2, Hydro pointed to continued strong margins, lower sales volumes and recycling margins. Overall, the company expects continued soft extrusions markets in Q3.  

Kaiser cools expectations for remainder of year

Though aluminum products manufacturer Kaiser expects demand across its end markets to remain consistent with 2023, with potential for a modest upside, the US company is taking a more cautious stance in some areas. That is particularly true in commercial aerospace due to lower-than-expected build rates in jets resulting in reduced anticipated shipments and conversion revenue year-on-year. “In the general engineering and automotive extrusions markets, typical seasonality and summer shutdowns, respectively, in the second half of the year are expected to result in a slight headwind to shipments,” the Tennessee-based company said. Packaging’s prospects are brighter as shipments are expected to improve from current levels, which were negatively impacted due to various outages during H1. They included unplanned downtime at the company’s Warrick rolling mill in Indiana.

The comments came after Kaiser Aluminum reported Q2’s shipments of 297 million lbs (135,000 mt) were 5.4% lower than in the year-ago period, leading to a 5.0% drop in sales revenue to $773 M (€711 M). The average realized price was little changed at $2.61/lb. The company’s Q2 net profit of $3 million was a sixth of the year-ago $18 million, partly due to a $9 million charge for inventory reductions. President and CEO Keith Harvey said, “Our business continued to perform well during the second quarter as demand met or exceeded our expectations. Importantly, aerospace and high-strength demand remained steady at strong levels.”

Porsche cuts forecast due to alloy shortage

Porsche AG announced a cut in its sales and profit outlook on Tuesday due to an unexpected aluminum alloy supply shortage. “The flooding of a production facility of an important European aluminum supplier” had caused “a significant supply shortage with regard to special aluminum alloys” that are used in “all vehicle series,” the company said. “Despite immediate countermeasures, it is becoming apparent that the impending supply shortage will lead to impairments in production,” it added.

Furthermore, Porsche said that the delays were “expected to last several weeks and may possibly lead to production shutdowns of one or more vehicle series.” It added that “delays in the production and delivery of vehicles will not be fully compensated for in the further course of the financial year.” Porsche did not specify the name of the supplier that was behind the announcement.

Constellium reports lower adjusted EBITDA and revenue

Constellium released its latest results for 2024 Q2. The aluminum semi-finished producers reported an adjusted EBITDA of €214 million versus €179 million last year, which the company said included a non-cash metal price lag impact of €42 million.

Revenue came in at €1.8 billion, down 8% y/y, amid shipments of 378,000 mt, down 5% y/y. The lower shipments y/y came from its Packaging & Automotive Rolled Products (P&ARP) and Automotive Structures & Industry (AS&I) segments. Overall, the lower revenue y/y was the result of the lower shipments, Constellium said. It was also the result of an unfavorable price and product mix, which was only partially offset by higher metal prices.

Regarding its P&ARP segment, Constellium stressed the unfavorable metal costs at its Muscle Shoals facility as a reason for the lower EBITDA as well as lower shipments overall and unfavorable prices and mix. For AS&I, the company highlighted the lower shipments of automotive and other extruded products, as well as the sale of Constellium Extrusions Deutschland in September 2023.

Editor’s note: These articles first appeared in CRU, SMU’s parent company. To learn more about CRU’s services, visit www.crugroup.com.