August 2022
AME’s forecast European average spot price for the September Quarter is US$2,500/t. Further curtailments in Europe could place upward pressure on this price should additional regional supply be removed from the market.

China’s supply growth, which has offset falls in Europe and the US to date, will face a test of its new energy control policies as the northern hemisphere heads later in the year. Easing prices over the remainder of the year are largely predicated on strong supply being maintained in China.

AME’s full-year European Spot price forecast is currently US$2,823/t. It is expected to ease further to average US$2,750/t in 2023. Despite ongoing supply struggles in the European region, continued supply growth in China is expected to, overall, more than offsets this. However, this could raise concerns over material coming from ‘dirtier’ sources.

AME’s September Quarter Australia FOB Alumina price is currently forecast at US$370/t. The steady return of production capacity in China has kept the market well supplied.

While Russian physical aluminium metal remains un-sanctioned and its production continues to flow, though has forced a new reconfiguring of supply chains. Of note, China has filled the void of Russian alumina supply from Australia after it imposed a ban. China is assumed to simply increase its imports from Australia, to meet the increase in exports to Russia.

Rio Tinto and Ford have signed a non-binding global MOU to develop sustainable and secure supply chains for battery and low-carbon materials. Under the agreement, the companies will work together to expand the supply of low carbon aluminium for use in Ford vehicles. This will likely focus on securing eventual metal produced using the zero-carbon ELYSIS smelting technology at Rio Tinto’s hydro-powered operations in Canada—essentially zero carbon aluminium metal.

Ford has made a spate of recent agreements to secure supplies of materials critical to the energy transition. Rio Tinto sees the agreement as an extension of its commitment to work with customers to help realise value in decarbonising its value chains. The MOU builds on Ford’s existing relationship with Rio Tinto as a primary aluminium raw material source for the F-150 pick-up truck with an all-aluminium body.

In a sign of a potential period of greater protectionism, the European Commission has announced it will not extend a nine-month suspension of anti-dumping tariffs on Chinese flat-rolled aluminium exports. The move was applauded by the regional industry association, European Aluminium (EA).

Following an anti-dumping inquiry last year, the tariffs on Chinese flat-rolled aluminium goods have been set at 14-25% to bring the dumping prices into market compliance and took effect on 12th July 2022.

Claims are often made that China’s subsidised production costs lead to the dumping of high-carbon goods in other markets. This is particularly sensitive in Europe, with the imports undercutting the region’s European Green Deal.