Record pricing levels for primary aluminium metal were not helped by Russia’s actions in Ukraine, however, with predominately individuals facing sanction, as opposed to companies’, commodity movements have continued, though uncertainty on future measures certainly remains.
A
price run up in early March from initial fears eased as retaliatory economic
measures became clearer. The realised average March Quarter price was
US$3,280/t, significantly above forecast as Europe’s energy struggles and their
impact on supply were exacerbated by Russia’s invasion of Ukraine. Reflecting a
3.6% increase over March, the price finished the month at US$3,567/t.
With no
clear conclusion to the situation in Europe, AME’s June Quarter price forecast
has been raised to US$3,400/t. Increased supply out of China and impacts on its
domestic demand caused by its Covid-zero strategy should see improved metal
availability ex-China but will take time. AME’s full year forecast has been
raised to US$3,180/t.
Production
constraints in China, and events in Eastern Europe, saw the Australia FOB
Alumina price rise through March, averaging US$493/t, up ~25% from the February
average. Alumina prices were unsettled by events in Ukraine—including the loss
of 1.7Mtpa of supply from the Nikolaev refinery—but production is returning in
China as energy efficiency measures are eased and new capacity in India is
ramping up. The aluminium supply issues in Europe are also crimping some demand
for alumina which is expected to see prices start easing. AME’s June Quarter
Australia FOB Alumina price is currently forecast at US$420/t.
In
light of Russia’s invasion of Ukraine, Glencore announced it is reviewing its
business dealings with Russian firms. Glencore currently owns a 10.5% stake in
En+ Group, the parent company of Russian aluminium producer, Rusal. Glencore
has stated it has no operational footprint in Russia and that its trading
exposure is immaterial. The company had already been easing ties with Russian
businesses under its current leadership. There has been a wave of Western
companies severing ties with Russia following the Ukraine invasion, largely in
response to pressure from both governments and shareholders, as well as a
response to sanctions imposed so far.
In
one of the latest developments in efforts to decarbonise the aluminium
production process, Mitsubishi Heavy Industries (MHI) Group have begun
assessing the feasibility of applying CO2 capture technologies at the 1.5Mtpa
Aluminium Bahrain (Alba) smelter. The study follows the signing of an MOU
between the two companies in January. MHI Engineering will provide the Alba
smelter with its KM CDR Process and represents the first application of CO2
capture technology in the aluminium industry.
While aluminium is expected to
play a significant role in transitioning to a decarbonised world, primarily due
to its light-weighting applications in electric vehicles and use in the
required infrastructure development, concerns are raised for the emissions
associated with the materials production—both to generate the electricity
required and direct emissions from the reduction process. Successful carbon
capture process tailored to the industry will help alleviate these concerns.

