By Greg Wittbecker, Advisor, CRU Group Since the onslaught of the war in Ukraine last month, the aluminum market has been fixated on the timing and severity of economic sanctions on the Russian aluminum sector. This attention is warranted given the importance of Russian primary aluminum in global trade. As discussed in prior columns, Russia […]
By Greg Wittbecker, Advisor, CRU Group We digress from the woes of aluminum supply this week to comment on the LME nickel market, which has redefined volatility with a capital “V.” LME nickel has exploded due to a massive Chinese speculative position amidst Russian uncertainty. Nickel fundamentals have been tightening for some time. In 2020, […]
By Greg Wittbecker, Advisor, CRU Group Two weeks ago, I described how the aluminum industry would not run out of metal supply in 2022 despite the fears of some. Fast forward to today, and we now have the worst case scenario of the war in Ukraine likely leading to Russia being a pariah in the […]
By Matthew Abrams, Analyst, CRU Group Now that we have seen the first steps of an invasion into Ukraine by Russian forces, the business concerns shift to the possibility of sanctions and how severe they might be. While initially the aluminum market itself is not expected to be directly targeted, there are various potential and […]
By Greg Wittbecker, Advisor, CRU Group We all read the same financial press. I am sure the readers share the feeling that it is always interesting when you hear experts opining about something in your chosen area of expertise. I was reminded of this when reading recent remarks from Jeff Currie, the widely respected and […]
By Greg Wittbecker, Advisor, CRU Group Nucor and Steel Dynamics Inc. (SDI) chose to acquire major metal recycling companies just before the Global Financial Crisis. SDI purchased Omnisource for slightly more than $1 billion in November 2007. Nucor followed suit with its $1.4 billion takeover of The David J. Joseph Co. in March 2008. The […]
By Greg Wittbecker, Advisor, CRU Group Given the fact that the standoff in Ukraine is ongoing, we thought it appropriate to stay on this theme of Russian aluminum supply and how the Russians try to overcome sanctions. The Ties that Bind Us Together – Russia and China Russia and China have a long association going […]
By Greg Wittbecker, Advisor, CRU Group In early December, we first sounded the alarm about the threat to aluminum supply should sanctions be re-applied to the Russians. It’s appropriate to update the situation now given some other changes in the aluminum supply-demand equation. European Primary Production Curtailments are Bigger and Deficit is Larger Higher power […]
By Greg Wittbecker, Advisor, CRU Group One of the hot topics resonating through commodity market forecasts is the risk to demand from a faltering Chinese real estate market. The well-publicized financial difficulties of Evergrande have raised fears that the property markets could destabilize. Other developers such as Kaisa and Sinic Holdings have also struggled to […]
By Greg Wittbecker, Advisor, CRU Group Virtually every mention of the infrastructure spending plans and Build Back Better touts renewable energy. We thought it might be worthwhile to talk about some of the tangible effects of that on solar photovoltaic (SPV) energy generation. The Solar Energy Industries Association (SEIA) is the best source of data […]
By Greg Wittbecker, Advisor, CRU Group Happy New Year. We hope you had a healthy and happy holiday season. The aluminum market is slowing coming back to life and witnessing serious supply constraints. European primary production is withering under high power prices. The impetus behind the rally in price is simple – incredibly high spot […]
By Greg Wittbecker, Advisor, CRU Group Legislation passed Dec. 16 by the Senate and now on its way to the White House will all but ban imports connected at any point in the supply chain to materials from China’s Xinjiang Uyghur Autonomous Region. However well justified by human rights, this ban will be a challenge for […]
By Greg Wittbecker, Advisor, CRU Group It’s that time of year when we start looking ahead as we put the current year in our “rear view mirror.” Here are some of the things that I circulated to the CRU Aluminum Analysis team for consideration among our “top calls for 2022.” These are not officially “blessed,” […]
By Greg Wittbecker, Advisor, CRU Group The massing of Russian troops on the border with Ukraine has raised tensions to a high level on the political scene. It forces us to take another look at the repercussions of new sanctions on the Russian state should Putin decide to invade. 2018 Repeated? In March 2018, sanctions […]
By Greg Wittbecker, Advisor, CRU Group Andy Grove, the former CEO of Intel, wrote a classic business book, “Only the Paranoid Survive.” One of the simple messages of that great read was to always pay attention to your competition. It’s for that reason, we thought it useful to update you on some of Alcoa’s recent […]
By Greg Wittbecker, Advisor, CRU Group Prices are higher…. why aren’t we seeing more aluminum production? One of the most natural questions being asked in the world of aluminum is “with LME prices up so much year on year, why aren’t we seeing more capacity coming back to life?” It IS an appropriate question and […]
By Greg Wittbecker, Advisor, CRU Group Quotas in exchange for exemption, a bad precedent for other countries There has been much written about the new détente between the EU27 and the USA in the aftermath of the deal to suspend duties on European steel and aluminum. There are also reports that something may also be […]
By Greg Wittbecker, Advisor, CRU Group Since I spoke at the Fall Management Meeting, the market has continued to experience tremendous volatility and new variables to consider. CRU has recently updated its expectation for market balances, premiums and LME prices. These forecasts can be seen in detail through our Aluminum Market Outlook subscription. Here are […]
By CRU Advisor Greg Wittbecker LME cash aluminum prices have retreated hard from new 13-year highs, falling from $3,300 last week to reach $2,682 as we completed the week. Supply-side Price Concerns Get a Reality Check but Remain Dangerous Market euphoria over supply-side constraints ran into the effect of China’s “command economy” at work. Power […]
By Stephen Williamson, CRU Research Manager, Aluminum Aluminum prices went through the $3,000 per metric ton mark on the LME this week. Fueled by energy constraints in China and tightening supply of alloy hardeners, the price broke through the $2,950 ceiling and ran up another $200. The price leveled at $3,150 as of this writing […]
By Stephen Williamson, CRU Research Manager, Aluminum Last week’s aluminum price below $3,000 per metric ton on the LME seemed like a bargain until it ran above $3,300 earlier this week. Yet, at week’s end, trading fell back to $3,050. Further confounding the market is magnesium supply and the prices raging on the hardener front. […]
By Stephen Williamson, CRU Research Manager, Aluminum As in last week’s report, aluminum prices continue to flirt with the $3,000 per metric ton mark on the LME, $2,908/t as of this writing. However, this apparently steady price range belies a torrent of market activity. The protracted energy curtailments in China continue to cast doubt on […]
By Stephen Williamson, CRU Research Manager, Aluminum Aluminum prices continue to flirt with $3,000 per metric ton on the LME. While off a bit, now at $2,866, recent upsets in the market make price volatility the norm in the near term. Energy curtailments in China exacerbate not only global aluminum supply but also silicon (Si) […]
By CRU Aluminum Advisor Greg Wittbecker Aluminum prices touched a 13-year high last week, flirting with $3,000 per metric ton on the LME. That throwback to 2008 is not a coincidence, corresponding to the last time that primary aluminum supply-demand balances were as tight as they are in 2021. In the period 2006 to first […]
By CRU Aluminum Advisor Greg Wittbecker China has been wrestling with inflationary tendencies in its aluminum market for some time: Spot Shanghai Futures Exchange (SHFE) high aluminum is at $3,516 per ton; that compares to $2,139 a year ago and $1,849 five years ago. The Chinese State Reserve Board (SRB) is releasing part of its […]
By CRU Aluminum Advisor Greg Wittbecker Steel and aluminum are vigorous competitors, but share a common plight, supply chain woes. Just-in-time manufacturing, lean manufacturing, vendor-managed inventory…we all know the buzzwords that have shaped the way both the aluminum and steel supply chains have operated for several decades. Since the Global Financial Crisis, the primary aluminum market […]
By CRU Aluminum Advisor Greg Wittbecker The fundamentals in the aluminum market are continuing to tighten as we complete the third quarter. Growing Deficit in 2021 Driven by Chinese and Canadian Production Excursions CRU has substantially increased the size of the global deficit for 2021, moving it from a 240,000-ton surplus to a deficit of 1,180,000 […]
By Greg Wittbecker, Advisor, CRU Analysis The $1.2 trillion infrastructure bill promises to deliver about $550 million in actual new investment. The breakdown of that investment looks as follow. Aluminum and steel have superior sustainability advantages and should exploit them. Clearly, the steel industry is cheering the passage as much as the aluminum industry. Both […]
By Greg Wittbecker, Advisor, CRU Analysis Over the past few months, we have seen a number of short-term strike actions around North America: a Montreal four-day strike in May and the Charleston International Longshoremen Association (ILA) filing strike notices at the same time. While both industrial actions have not resulted in extended work stoppages, they […]
By Greg Wittbecker, Advisor, CRU Analysis Workers walked out of Rio Tinto’s Kitimat, British Columbia, smelter on Sunday, July 25, after failing to secure a new contract. The union voted 100% in favor of the strike. This smelter was operating at 383,000 metric tons/year. Some familiar themes are at the center of the labor dispute. […]