Two-thirds of Europe's primary aluminium smelters might shut in the near future

Posted by tjdetai on August 10th, 2015

Two-thirds of Europe's primary aluminium smelters might shut in the near future, because they are struggling with high costs, the European Aluminium Association said. Next week's climate change talks in Copenhagen could be a first step towards a long term solution, but they will not address the present critical situation of most of the region's aluminium industry, the secretary-general of the European Aluminium Association (EAA).

PRICES Aluminium prices ended December at ,245 a tonne, up from ,065 a month earlier and ,540 at the end of 2008. Three months trended higher in the first half of last month, reaching the month's high of ,305 a tonne on Dec. 14. Prices eased off after that and held to a narrower range in the remainder of the month. But the market surged in early January on worries that power shortages in top producer China would affect smelter output and three-months reached.

On Jan. 6, aluminium reached ,394 a tonne, its highest since early October 2008. STOCKS Total exchange stocks were 4,921,934 tonnes at the end of December, equating to around 45 days of demand. At the end of November they totalled 4,870,116 tonnes. Most of this is accounted for by LME inventories, which stood at 4,624,425 tonnes at the end of December, compared with 4,599,700 tonnes a month earlier. Total visible stocks, including latest International Aluminium Institute (IAI) unwrought stocks were 6.060 million tonnes, up from 6.007 million tonnes. Estimated aluminium stocks at the Japanese ports of Yokohama, Nagoya and Osaka totalled 180,500 tonnes at the end of November, up 5.4 percent from October, trading house Marubeni Corp said. Stocks had fallen to 169,600 tonnes at the end of September, the lowest since Marubeni began taking records about 14 years ago.  

Japan's demand for aluminium, widely used in packaging and transportation, plunged after the economic crisis, as large manufacturers cut production. Demand has returned to about 80 percent of the previous year's level but industry officials are worried that the pace of the recovery will slow down next year after the impact from initial government stimulus measures have had their affect.  Moreover, demand from the construction sector, a major consumer, remains in a slump.

For much more info:smo 254