Century and Alcoa Close Smelter Capacity We talked about the INTALCO saga in a recent column and its inability to find competitive power to re-open this smelter. Power has again reared its ugly head and delivered another serious bite to the industry. Century Aluminum announced on June 24 that it would be immediately curtailing production […]
By Greg Wittbecker, Advisor, CRU Group Century Aluminum Falls Prey to the Pitfalls of Day-Ahead Electricity Pricing When we wrote our column last week about INTALCO and the shortcomings of US energy policy, little did we know that we would see another example of this within a week. On Wednesday, June 22, Century Aluminum (CENX) […]
By Greg Wittbecker, Advisor, CRU Group The Saga of the Alcoa INTALCO Aluminum Smelter In April 2020, Alcoa announced its decision to close its Ferndale, Wash., primary aluminum smelter known as INTALCO. This smelter was built in 1966 by the French aluminum giant, Pechiney, and at its peak produced 284,000 metric tons per year. In […]
By Greg Wittbecker, Advisor, CRU Group Global Deficit Reduced Again The headline on aluminum fundamentals is that the deficit is shrinking again. We now believe that the global deficit will be about 700,000 metric tons compared to 1,000,000 metric tons in April. This deficit is exclusively held in the World ex-China, as we believe China […]
By Greg Wittbecker, Advisor, CRU Group The First Movers Coalition (FMC) was launched in November 2021 at COP26 as a public-private partnership to decarbonize hard to abate sectors. At that time, the 25 founding members of FMC targeted eight sectors where innovative technology would need to be applied to effect change. The sectors of initial […]
Major capital investments come to the aluminum can sheet market By Greg Wittbecker, Advisor, CRU Group This month, the market has seen two new projects announced in the flat-rolled aluminum product sector: • Novelis will spend $2.5 billion for a new state-of-the art rolling mill in Bay Minette, Ala. • Ball Corporation will partner with […]
By Greg Wittbecker, Advisor, CRU Group The London Metal Exchange announced plans on May 13th to require its members to make weekly reports of their over-the-counter (OTC) transactions to the Exchange. It also set an unusually short consultation period of two weeks for member response. This action is in direct reaction to the debacle in […]
By Greg Wittbecker, Advisor, CRU Group The LME cash price for high grade aluminum continues to give ground, with prices at $2,715 per metric ton versus $2,861 per ton last week. There is still a lot of gloom and doom out there. Fear factor over demand is dominating price discovery Here are a few of […]
By Greg Wittbecker, Advisor, CRU Group US equities market this past week were a microcosm of how fast sentiment can change. It reminded me of a favorite statement I use to explain commodity trading to people outside our world: “Markets move on fear and greed.” Welcome to the fear cycle. This cycle has plenty of […]
By Greg Wittbecker, Advisor, CRU Group Since the outbreak of the war in Ukraine, the aluminum market has fixated on potential sanctions on Russia’s 3+ million metric tons of annual exports. So far, those sanction have not materialized. Several major players have announced their intention to suspend new business with Russia. Emphasis on “new business.” […]
By Greg Wittbecker, Advisor, CRU Group It is natural to speculate about how well demand for aluminum can hold up given the effects of dramatically higher prices, both on aluminum itself and the broader economy. Conversations with many of our clients’ center on concerns about demand destruction. The logic is simple: With gasoline, food and interest […]
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 […]