CRU: Aluminum news roundup

Brimstone aims to replace bauxite with carbon-free calcium silicate rocks, reducing the dependence of the US alumina industry on imported bauxite. The company will begin pilot operations in 2025 and seeks to have its commercial demonstration plant operating by the end of the decade.

EU considers gradual restrictions on Russian aluminum, media sources say

According to articles published by both Reuters and Bloomberg, the EU is considering import restrictions on Russian aluminum and phasing out liquefied natural gas from Russia as part of a new package of sanctions.

Regarding aluminum, restrictions would be gradual with a timeframe and scope still to be determined, the articles added. Furthermore, the articles specify that the draft proposals are still being discussed between member states and could change before they are formally presented.

Overall, the EU aims to close more loopholes that allow Moscow to evade existing restrictions. The EU is expected to adopt the new package of measures next month. February 2025 will mark three years since Russia’s invasion of Ukraine. This would be its 16th package of sanctions since the war began.

According to Reuters, Moscow was quick to respond by saying that EU sanctions on imports of Russian primary aluminum would risk destabilizing an already ‘fragile’ global market.

New industry and labor council forms to collaborate on tariff and CUSMA issues

It was announced recently that a new committee would be formed by the Canada US Trade Council, which includes participants from a variety of sectors such as steel and aluminum. The group will be led initially by the CEOs of the Aluminium Association of Canada and the Canadian Steel Producers Association. It will convene regular meetings to share information and ideas for how best to approach the tariff discussions and the subsequent CUSMA review phase.

The group is not a lobbying or an advocacy organization, the statement says, but will focus instead on sharing information and ensuring an ongoing conversation, including with key government officials who are responsible for these files. Canadian and provincial government officials will be invited to participate on a recurring basis to share knowledge, update on current developments, and gather input from participants.

“By bringing together from across Canada, industry, unions and experts, the council provides a dynamic and timely platform to freely address issues strategies and opportunities with government officials. This crisis is worth all our efforts, and we must seize the moment to grow Canada stronger within a safer, more secure and competitive business environment for our future. Co-chairing this initiative with my colleague from the steel industry is a privilege,” said Jean Simard, President and CEO, Aluminium Association of Canada.

Rio Tinto and Glencore held merger talks according to various media reports

According to articles published by Reuters and Bloomberg, Rio Tinto and Glencore have been holding discussions about combining their businesses, but the two companies declined to comment.

If successful, this could create a combined company with a market value of around $158 billion, surpassing top miner BHP’s $126 billion valuation, the article says. A source told Reuters that Glencore approached Rio late last year, but the talks were brief and no longer active.

This would not be the first time the two companies have considered joining. In 2014, Rio Tinto rejected a merger offer from Glencore that would have allowed the combined company to surpass BHP as the world’s biggest miner, the article concluded.

Steel and aluminum associations call for EU actions against scrap leakage

The European Steel Association (EUROFER) and European Aluminium have issued a joint statement calling on the European Commission to address the problem of scrap leakage. According to the statement, exports of aluminum scrap have reached about 1 million tons annually in recent years, and in 2023 amounted to 1.2 million tons. A new record is expected by the end of 2024 with more than 1.3 million tons.

The association mentioned higher prices, paid by processors from third countries that view scrap as an important resource, as the main reason for the leakage. These countries are investing heavily in increasing their recycling capacity, the statement says, and this creates additional unfair market competition.

Both associations call on the EC to consider the approach proposed in Mario Draghi’s report –- measures to restrict scrap exports to those third countries which have imposed export restrictions on their critical raw materials. They also propose to use the EU’s Foreign Subsidies Regulation, the Waste Transport Enhancement Regulation, and the Critical Raw Materials Act to introduce a stricter scrap export regime. In addition, the associations recommend revising the Worn Out Vehicles Directive.

This was first published by CRU. To learn about CRU’s global commodities research and analysis services, visit www.crugroup.com.