LME aluminum renews with gains amid softer US dollar

Written by Guillaume Osouf

The LME 3-month price is moving higher on the morning of 12 March and was last seen trading at $2,263 /t. The LME has increased by around $30 /t since the start of the week amid a softer dollar in anticipation of US CPI inflation data later today.

SHFE aluminium was broadly stable today again. The cash contract first settled at RMB19,170 /t and last traded at RMB19,180 /t.

Alumina to be taken over by Alcoa

Australia-based Alumina Limited has signed a binding scheme implementation deed with partner Alcoa, enabling the US-based aluminium producer Alcoa to conditionally acquire 100% of Alumina. The deal values the company at approximately $2.2 bn (€2.0 bn). “We believe the time is right to combine our two companies,” said Alumina chairman Peter Day. “The combined entity will have a larger and stronger balance sheet and be better able to fund the current portfolio restructuring actions in AWAC, as well as realising potential growth options in the medium to longer term.”

AWAC refers to Alcoa World Alumina and Chemicals, i.e. the companies’ joint venture (JV) which has bauxite, alumina and aluminium interests worldwide. Melbourne-headquartered Alumina argues that a joint venture with Alcoa will give shareholders exposure to a global pure-play upstream aluminium company and to a metal that is key for energy transition and decarbonisation, while also simplifying AWAC’s corporate structure and leading to more efficient funding, resulting in potential financial synergies.

Alumina’s directors have recommended that the company’s shareholders vote for the transaction, in the absence of an alternative proposal and given an independent expert insists the deal is in their best interests. Completion is expected in Q3, provided shareholders and regulatory authorities approve the transaction and customary conditions are cleared. If concluded, Alumina Limited’s shareholders will own 31.6% of the enlarged Alcoa and existing Alcoa shareholders 68.4%.

Share of Russian aluminium on the LME increases slightly to 91%

According to the latest Country of Origin Stock Report published by the LME this week, the share of Russian aluminium on the LME increased slightly in February to 91%. There was an increase of 37,925 t Russian aluminium from January and the total now amounts to 324,675 t out of the 356,300 t of open warrants.

Meanwhile, the amount of aluminium of Indian origin was stable at 28,900 t m/m. However, the share logically came down slightly to 8% of total open warrant. This is down from the peak of 53% when the LME first published this data in January 2023. At that time, the share of Russian aluminium was lower, at 41%. While the share of Russian aluminium steadily increased since that time, the opposite happened for Indian-made aluminium.

As for the total amount of LME stocks, the LME reported 575,675 t as of today, 12 March. This is 10,925 t down from the start of March. Over this period there has not been any significant inflows of metal besides a mere 475 t delivered in Gwangyang on Friday. This is in contrast with February when over 80,000 t were delivered mostly in Gwangyang. This means that the share of cancelled warrants increased slightly this month to almost 40% of total LME stocks.

Alba and EGA sign Technology Service Agreement for Reduction Line 6

Alba and EGA have announced this week the signature of  a new agreement for Alba’s Reduction Line 6. The Agreement encompasses both onsite and remote assistance wherein EGA will provide Alba’s Reduction Line 6 with technical support services, monitoring services as well as operational consultation. The agreement also covers operational and process audits, technical training workshops, as well as hands-on operation support among others.

Commenting on this occasion, Alba’s CEO Ali Al Baqali stated: “Alba’s Reduction Line 6 is a success story built upon the foundation of our exceptional local talent and bolstered by EGA’s DX+ Ultra technology playing a role in it. We are excited to build on our partnership with EGA through this technical services agreement as it will enable our human talent to continuously benefit from EGA’s DX+ Ultra advancements and achieve our sustainability objectives.”

US makes preliminary anti-subsidy rulings on lithographic printing plates

The US Department of Commerce announced earlier this month a positive preliminary anti-subsidy ruling against aluminium lithographic printing plates imported from China. The preliminary ruling stated duties range from 38.50% to as much as 231.98% on specific companies. The Department of Commerce is expected to make a final countervailing ruling on 9 July 2024.

This case involves products under US customs codes 3701.30.0000 and 3701.99.6060 and some products under 3701.99.3000 and 8442.50.1000. On 19 October 2023, the Department of Commerce launched an anti-dumping and countervailing investigation into aluminium lithographic printing plates imported from China and an anti-dumping investigation into the same plates imported from Japan.

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