|Norsk Hydro III
|but none are particularly bullish.
"Saddled with surplus and new capacity, aluminium is a metal for which it is hard to get excited," says Meir. "We have near-term lows of $1,827/tonne for aluminium, with a downside of $1,730 for 2012, but the price could rally to $2,080 later this year. Next year we expect the trading range to be $1,800-2,200/tonne, corresponding to an average of $2,000."
Despite China's overall economic growth, "The Chinese equity market has been sinking for years," Meir notes, which he says gives a clue to underlying uncertainties about how robust Chinese economic conditions really are. Some suspect loans and one or two troubled banks give the analyst further cause for concern.
Snowdon also says that aluminium remains burdened with record overcapacity and inventory, which prevents a sustained positive trend in flat prices. "A key to us becoming ultimately more constructive about the aluminium market would be a moderation in the impact of financing deals, but we struggle to see any dramatic shift over the next 12 months - there is unlikely to be any dramatic change."
He adds that costs for the aluminium sector globally are an important factor which could alter market dynamics. "They have the potential to force a shift on the supply side. There has actually been a slight moderation in cost inflation in aluminium this year since some inputs are linked to the LME primary aluminium price. Nevertheless, energy aspects will continue to be a source of inflation, putting pressure on margins. We don't see costs being a game breaker for 2012 or 2013, but they still need careful monitoring. They are a key factor that can make or break the supply side's ability to continue to operate under the current price level."
Citi has forecast modestly rising aluminium prices, with an estimated average price of $2,125/tonne expected next year. "We just don't see a particularly big upside and don't see the current prices giving impetus to production cuts, with excess continuing to be absorbed by investor demand for metal to put into financing deals," says Wilson.
He says that the energy cost outlook is looking fairly benign. "US gas prices are low and, with shale gas production in the USA set to climb, and with the emergence of shale oil production, the USA could even become a net exporter of oil. Eastern Chinese smelters are being supported by subsidies against high energy costs, while the growth of smelter capacity in the west of China is being spurred by significantly lower energy costs in Western states."
Snowdon stresses that the situation now is different from 2008, when 8 million tonnes of capacity was removed from use. "We don't contemplate a dramatic shift in the finance backdrop, which means we are unlikely to see as dramatic shifts in the supply picture over the next 12 months."
The long-dated contango has been very strong this year, but commercial hedging comes in waves, meaning that tighter spreads do arise from time to time, temporarily weighing against the economics of financing and resulting in off-warrant material coming on to the physical market, Snowdon explains. "Physical premiums certainly won't necessarily rise inexorably over the next 12 months."
As and when change does eventually take place in the financial picture, such as a firm move towards higher interest rates, that will have a softening impact on physical premiums, although bottlenecks in removing metal out from exchange inventories are likely to prevent a dramatic flooding effect of the physical market, concludes Snowdon.
Adkins reminds that the Chinese aluminium industry as a broadly denationalised enterprise is still relatively young, so the possibility of a reversal of privatisation policy in the future if smelters become increasingly uneconomic does not seem out of the question. However, he cautions that China views its aluminium sector from a different perspective than do Western eyes: not so much as a market or even an industry, but rather as a long-term strategic means
|to much bigger goals, including urbanisation, increasing the nation's capital stock per capita to catch up with other industrialised countries, and advancing aerospace and potentially military development. "On a 30-50 year timeframe, aluminium is a vital part of that bigger picture."
"You have to say that latent demand continues to be very robust as far forward as the eye can see. The market in China is not the main question. The industry is not the main question. Strategic development of the people is." So the question the Chinese ask is how to ensure that China has enough of the light metal to ensure it plays its part in the future of the country, he concludes.
World refined aluminium production*
Region 2010 2011 H1-2011 H1-2012
Europe 8,710.5 8,981.0 4,481.0 4,461.4
Norway 1,090.0 1,202.3 601.2 601.1
Russia 3,947.0 3,992.0 1,981.3 2,040.0
Africa 1,742.0 1,812.7 888.7 790.5
Asia 21,730.2 24,304.3 11,820.6 12,753.1
China 16,244.1 18,061.7 8,686.3 9,489.3
India 1,609.9 1,659.7 846.5 849.4
UAE 1,342.9 1,765.0 877.5 948.1
Americas 6,997.2 7,153.4 3,526.4 3,436.0
Brazil 1,536.2 1,440.4 709.6 727.3
Canada 2,963.2 2,983.1 1,478.7 1,346.9
USA 1,727.2 1,983.5 950.8 1,051.3
Oceania 2,272.0 2,302.0 1,137.0 1,127.5
Australia 1,982.0 1,945.0 962.0 962.5
World Total 41,451.9 44,553.4 21,853.7 22,568.5
*'000 tonnes. Source: WBMS
World refined aluminium consumption*
Region 2010 2011 H1-2011 H1-2012
Europe 8,137.6 8,374.9 4,446.5 3,898.9
Germany 1,911.8 2,103.3 1,077.3 1,021.5
Africa 711.2 701.5 351.0 351.0
Asia 24,460.6 26,496.6 12,933.9 14,092.0
China 15,854.5 17,628.7 8,501.3 9,501.1
India 1,474.8 1,569.2 760.7 870.0
Japan 2,025.0 1,945.8 953.6 963.0
South Korea 1,254.6 1,233.3 645.9 667.3
Americas 6,423.1 6,404.1 3,219.5 3,463.0
Brazil 985.1 1,077.1 554.6 507.6
USA 4,242.5 4,060.0 2,043.5 2,493.4
Oceania 319.2 355.2 177.6 163.4
Word Total 40,051.8 42,332.2 21,128.4 21,968.2
*'000 tonnes. Source: WBMS
Et relativt depressivt Al-marked kan komme til å se trøstesløst ut, dersom China fortsetter å bygge ut ny kapasitet som er i den dyreste enden av cashcost kurven.
Hva skal da de som ligger under, men ikke kan nyte godt av de samme subsidiene gjøre??
MB 27th INTL AL CONF: China will boost costly production further
Jethro Wookey, metalbulletin.com
Sept. 14, 2012
China will continue expanding its aluminium production capacity even as the cost of production at all of its smelters sits well above the price, as the light metal remains central to the government's infrastructure building plans, AZ China md Paul Adkins said.
Speaking at Metal Bulletin's 27th International Aluminium conference in Moscow on Friday September 14, Adkins said that around 10 million tpy of new production capacity is planned in China, despite the problems with its current industry.
"China's production sits in the top quartile of the cost curve, consumes scare energy resources, is forced to import raw materials and jeopardises environmental integrity," Adkins said. "Yet 10 million tpy of new capacity is still to come."
Adkins said that China's demand for aluminium will come from massive infrastructure growth over the next decade, including 1 million km of new roads, 28,000 km of mostly underground metro rail, 50,000 new skyscrapers and 97 new airports.
China will not turn to the international market for its aluminium needs because to do so would cost jobs and money. The domestic aluminium industry also has low barriers to entry - including regional incentives that include power concessions.
But the main reason China's aluminium industry will grow despite t
|Takker for interessant lesestoff, ON.
Veldig fin-fin utvikling for Bull-Alu-H. Dette vil nok smitte over på NHY ila uka. Har ikke aksjen, men sitter på endel calls og puts. Så det er samme hvilken retning det bærer bare det ikke blir sideveis.
Det er græla billige OTM calls og puts å få kjøpt, les også over.
|Forrige ukes Bull-Alu-H sammen med gårsdagens utvikling i aluminiumsprisen smittet voldsomt over på NHY i går. Begge ser ut til å fortsette videre nordover i dag.
Som med STB, kjøpsinteressen har tatt seg voldsomt opp siste døgnet, dvs siden månedsskiftet. Som med STB, det ser ut til å tegne seg muligheter for et nytt trinn i trappa. Første trinn for NHY var 23-26, andre trinn var 24-29,50.
Det kommende trinnet vil jeg å være verdt 4,50 pluss/minus 50 øre. Med dipper ned på inntil ei krone underveis.
Med Cliff Grexit er alle bets off.
Endret 02.10.2012 14:56 av gorwell
|Deutsche Bank kutter kursmålet på NHY fra 35,00 til 34,70
Dette er da ellers knapt en justering... Morsomt.
Ellers anbefales shorting. Noe som vil være lettere hasardiøst med tanke på at LME-aluminiumet for det alt vesentlige er bundet i langsiktige finansielle kontrakter og kommer til å være det i ubestemt fremtid...
Og at fysiske leveranser av Al betales med premium.
Endret 03.10.2012 14:13 av gorwell
|Svært bilde av Brantzæg på forsiden, intervju inne i magasinet
Interview: Norsk Hydro ceo Svein Richard Brandtzæg discusses premiums, capacity cuts , demand imbalance
High Al premiums hitting remelt business
by Andrea Hotter, Metal Bulletin Weekly
Oct. 1, 2012
New york - Record-high aluminum premiums are typically positive for producers, but are starting to eat into the profits of companies that remelt metal, such as Norsk Hydro, its ceo told Metal Bulletin.
High premiums are "in general, positive" for the company, particularly as it gets paid more for the value-added metal products it produces, Svein Richard Brandtzæg, who heads the Norway-based producer, said.
But Hydro also has a significant portion of remelt, where standard ingot is one of the input costs.
"In this part of the business, we have seen reduced profitability due to standard ingot premiums," he said. "In an ideal world you could therefore argue that it would be better for Hydro that the LME is a higher percentage of the total price than it is today."
Aluminium premiums have been on a steady upwards trajectory for some time, but have skyrocketed in recent months. Metal Bulletin's duty-paid premiums in Europe are nearing $300 per tonne at the same time as London Metal Exchange prices are still relatively weak, despite a recovery in recent days.
Norsk Hydro is being additionally hit by the fact that a majority of its alumina sales contracts will still be linked to the LME aluminium price over the next few years, Brandtzæg said. This will change from 2015 onwards, when the company starts to switch its long-term supply contracts - inherited from its acquisition of Vale's bauxite and alumina assets in Brazil - to index pricing from the percentage-based terms currently used.
"Hydro is of the clear opinion that the pricing for alumina should be based on the merits of alumina as a stand-alone commodity, not as percentage of the LME," he said. "This view is not changed by the development of premiums, but if anything, the high premium adds to the reasoning behind de-linking the alumina price," he added.
High premiums are proving a boon to producers, currently accounting for around 10% of their revenues, up from around 3-4% previously. Brandtzæg attributed the strength of premiums, despite weak demand in Europe, to supply and demand for standard ingot.
"You have a situation today where financial players are able to make a risk-free return on cheap interest rates, relatively low warehousing costs and a contango in the market, and hence are competing with consumers in the standard ingot market," he said. "This leads to a tight physical market for standard ingot, particularly in Europe, but we also see similar levels in Asia and the USA," he added.
Financing deals and warehousing queues are being attributed as a major reason behind the high premiums. Informal industry complaints about the inability to quickly access metal in certain locations has kept warehousing under increased scrutiny by the LME, with a review ongoing currently.
Brandtzæg declined to comment on whether he would like to see the LME change its warehousing rules.
|Tar inn mer penger her (lavere utgifter til energi, lavere utgifter til alumina, høyere inntekter på premiums), taper litt mer penger der (lavere verdi på selskapets kraftkontrakter, lavere verdi på selskapets alumina-kontrakter, lavere priser på LME-kontraktene).
En CEO må forventes å sutre for sin syke åkke som.
Endret 04.10.2012 12:29 av gorwell
Hydro har netto tjent på hedging de siste årene, nå kan det se uit som de kan gå på tap på eksisterende kontrakter de neste årene.
Ellers, Hydro er "long" alumina, dvs. de produserer mer enn egne smelteverk behøver, slik at de må selge overskuddet i markedet. Derfor ønsker de (selvsagt) høyere priser på alumina.
|Har falt tilbake til 62% fibo av oppgangen 23,00-29,50 og løftet seg derfra til 38% fibo av fallet 29,50-26,30. Det kommer inn en halvsterk motstand her pluss/minus 27,50.
Jeg mener fortsatt at det tegner seg et trinn i trappa, men det er også en HS-formasjon mellom 26,50 og 29,50 med dobbel høyre skulder som muligens tegnes.
Monday: After the close Alcoa reports 3Q earnings. Alcoa's EPS is expected to come out at 0.01, down 93.6 percent from last year. EPS estimates have plunged 75.7 percent over the last three months despite a recent 15 percent surge in aluminum prices.
Stygt. Men det skal ikke mye til for å banke slike estimater. 1 cents bedre inntjening er 100% estimatbom....
Endret 05.10.2012 10:23 av gorwell
|Tenker vi har bekreftelse på at et nytt trinn i trappa skal tegnes.
|Kopi fra en rapport ang. et analytikerbesøk ved Karmøy Al-smelteverk.
Datoen var Mai-2012, slik at det er litt datert, men intet er nok endret de siste 5 måneder.
En "hyllest" til Karmøy fabrikken og organisasjonen der ute.
Norsk Hydro: Site visit to Karmoy - probably the best AP18 aluminium smelter in the world>
Norsk Hydro (NHY) hosted a visit to its Karmoy alumimium smelter in Norway yesterday. In many ways Karmoy has been a case study on technological evolution in the aluminium industry since commencing production in 1967. Through incremental improvements and implementation of Hydro's "AMPS" programme in recent years, Karmoy is now one of, if not the, most efficient smelters of the AP18 generation.
Overview. In 2011, Karmoy produced 184kt of primary metal (~9% of total NHY output) and 292kt of finished products (in the form of extrusion ingots, wire rods and rolled products), with the difference mainly made up by purchases of cold metal from the LME. Most of the 2.6TWhrs pa of electricity required by the smelter is supplied by NHY's hydroelectric plant at Suldal; while alumina (mainly from Alunorte in Brazil) and pre-baked carbon anodes (from Aluchemie in the Netherlands and NHY's own Ardal plant in Norway) are delivered by boat to Karmoy's dedicated quay. Likewise 95% of finished production from the asset is shipped by sea.
Best in AP18-class. By NHY's reckoning Karmoy is the world's most efficient smelter currently using AP18 technology in terms of electricity consumption (~12.8 kWhrs/kg at present), gross anode consumption and iron content in finished metal, and compares well on a number of other important metrics. In part, the company puts this down to its Aluminium Metal Production System ("AMPS") optimisation programme. Inspired by Toyota's processing systems, NHY estimates the programme has driven ~$200/t of cost reductions in its primary metal business since implementation in 2007 and is targeting a further $100/t in savings.
Case study in capacity creep. Karmoy's 288 pots are now running at an amperage of ~235 kA, versus AP18's originally intended amperage of 180 kA. More amps means more production, but would also normally be associated with a reduction in current efficiency and anode consumption; however in recent years Karmoy has bucked this trend with improvements in both measures. Electricity consumption has also fallen from ~15 kWhrs/kg in 1993 to ~12.8 kWhrs/kg at present, in line with NHY's new HAL4e cells currently being developed at Ardal.
Technological evolution inevitable feature of aluminium industry. Impressive as Karmoy's incremental gains are, the adjacent remnants of the old Soderberg pot-line (which was decommissioned in 2009 and is now "Norway's largest ever demolition project") testify to the likelihood that AP18 will eventually be superseded by newer, cleaner, cheaper technology, whether it be NHY's HAL4e or RIO's AP60.
Endret 08.10.2012 21:16 av OldNick
|Er det noen som vet når Alcoa slipper resultatet?
|Etter børsslutt i USA
|Sterkt ødeleggende negativt resultat fra AA.
Shares of Alcoa slid 4.7 percent to $8.70 and weighed on the Dow following the U.S. aluminum producer's report late Tuesday of a quarterly net loss. Alcoa attributed the loss to a slump in the price of aluminum and weak demand. On Wednesday, a Nomura analyst cut the target price on Alcoa's stock to $9 from $12, citing "continued weakness in aluminum prices" as a key reason for the change.
Med en forventet vekst i etterspørselen redusert fra 7% til 6%, hvordan det kan hevdes weak demand er beyond me.
Regelen om at et regnskap viser hva administrasjon og styre ønsker å vise, har få unntak.
|Nomura kutter Hydro
Ser nedsiderisiko for aluminiums-prisen...
|NHY: Hydro og Orkla danner verdensledende leverandør av aluminiumløsninger
Norsk Hydro ASA og Orkla ASA har blitt enige om å slå sammen de respektive virksomhetene innen profiler, byggsystemer og rør, og danne en verdensledende leverandør av aluminiumløsninger. Det nye sammenslåtte selskapet, som vil hete Sapa, blir et 50/50 joint venture eid av Hydro og Orkla.
Avtalen innbefatter Profiles og Building System, i tillegg til Extruded og Welded tubes, fra Orklas heleide Sapa og hele Extruded Products fra Hydro.
Basert på tall fra 2011 vil det sammenslåtte selskapet ha omlag 47 milliarder kroner i årlig salg, underliggende EBITDA på om lag 1.9 milliarder kroner og om lag 25.000 ansatte*. Det nye selskapet vil ha ledende posisjoner i Europa og Nord-Amerika, og sterkt fotfeste i fremvoksende markeder, inkludert Brasil, Argentina, Kina, India og Vietnam.
Transaksjonen ventes å bli gjennomført i løpet av første halvår 2013, etter godkjennelse fra relevante konkurrensemyndigheter. Svein Tore Holsether, i dag administrerende i Sapa, blir konsernsjef for det nye selskapet, og Arnstein Sletmoe, i dag direktør for Mergers & Acquisitions i Hydro, blir oppnevnt til økonomi og finansdirektør. Konsernsjef i Hydro Svein Richard Brandtzæg blir styreleder i det nye selskapet. Sapa vil ha hovedkontor i Oslo.
Sammen skaper vi et sterkere selskap med en bredere kompetansebase og et meget erfarent lederteam. I dagens meget krevende markeder vil det nye selskapet være bedre rustet for restrukturering og verdiskapning. Dette vil styrke Orklas evne til å utnytte potensialet for verdiskapning i vår aluminiumvirksomhet, sier Orklas konsernsjef Åge Korsvold.
Det nye selskapet vil ha den nødvendige styrken til å møte dagens utfordrende markeder og å skape en plattform for videre vekst i fremvoksende markeder, sier Hydros konsernsjef Svein Richard Brandtzæg. - Denne transaksjonen bidrar til å styrke Hydro som et verdensledende, ressursrikt aluminiumselskap med robuste posisjoner langs hele verdikjeden. Gjennom kombinasjonen med Sapa vil Hydro etablere en ny struktur for sin virksomhet innen ekstruderte produkter som er posisjonert for økt lønnsomhet og med økt potensial for fremtidig vekst, sier Brandtzæg.
Som en del av avtalen vil Hydro (gjennom Hydro Aluminium AS) og Orkla (gjennom Sapa Holding AB) bidra med de relevante forretningsområdene i det nye selskapet mot en eierandel på 50/50 basis. For å kompensere for forskjell i størrelse og å harmonisere visse balanseposter vil Orkla, i tillegg til 50 % eierandel, motta 1,8 milliarder kroner fra det nye selskapet. Beløpet forventes å bli betalt innen 6 måneder etter at avtalen gjennomføres.
Betydelige forbedringstiltak pågår i begge selskapene og vil, sammen med antatte årlige synergieffekter på en milliard kroner, bidra til en videre styrking av det nye selskapet. Globalt forventes fortsatt sterk vekst i etterspørselen etter ekstruderte produkter.
Aluminium er fremtidens materiale. For å møte kundens krav og forventninger må vi fortsatt være ledende innen forskning og utvikling, levere med presisjon og optimalisere vår globale tilstedeværelse. Begge selskapene har vist en evne til å øke kvaliteten og effektiviteten, og sammen er vi bestemte på å få det beste ut av de to selskapene når de samles som ett, sier Svein Tore Holsether,
administrerende direktør i Sapa.
Avtalen inneholder bestemmelser der begge parter kan initiere en prosess for børsnotering etter omlag tre år fra gjennomføring, og hvor begge parter kan bestemme seg for å beholde 34 % eierandel.
Det nye selskapet vil bli presentert som et tilknyttet selskap i henhold til
*) Illustrative tall for det nye selskapet 2011, urevidert
Dette ser ut til være deler av begge selskap som sliter, Ebi
Endret 15.10.2012 09:15 av OldNick
|Pokker TA meg, dette trinnet ser ut til å ta feil vei....
|Har plukket en bunke blomster, eh NHY2K29.
Stock`en inviteres til å sjekke prisene på de nære ting.
|SorAl er et Rio Tinto-verk, ikke NHY (som kun 49.9%).
8 års fortsatt drift, men hjelper det om verket virkelig ikke er levedyktig?
NHY: Norsk Hydro: Søral sikrer kraft til fortsatt drift
Sør-Norge Aluminium (Søral) på Husnes har inngått kraftkontrakter med Agder Energi, Lyse, Statkraft og Hydro for langsiktig, årlig tilførsel av opptil 2,6 terawattimer (TWh) elektrisk kraft over en periode på åtte år, med oppstart i 2013.
- Vi er glade for at Søral har vært i stand til å sikre strømforsyning som legger til rette for fortsatt drift ved aluminiumverket. Vi har jobbet hardt for å oppnå dette, og vi er glade for at alle brikkene falt på plass til slutt, sier administrerende direktør Per Øyvind Sævartveit ved Søral.
De samlede kontraktene, sammen med nødvendige avklaringer vedrørende implementering av CO2-kompensasjon, vil sikre grunnlaget for fortsatt kommersiell drift ved aluminiumverket Søral på Husnes, som eies av Rio Tinto Alcan og Hydro. Kontrakten som gjelder i dag utløper i desember 2012.
- Dette er en milepæl for Søral og for Hydro som deleier, og svært viktig for vår norske aluminiumsvirksomhet, sier Svein Richard Brandtzæg, konsernsjef i Hydro. - Det viser at norsk industri og kraftprodusenter sammen kan finne løsninger som sikrer at Norge forblir et sted hvor det er mulig å produsere aluminium med ren, fornybar kraft. Det mener vi er bra for Hydro, for Norge som industrinasjon og for det globale klimaet.
Søral stanset driften ved en av de to produksjonslinjene etter finanskrisen i 2009, og produserer i dag rundt 90 000 tonn aluminium per år. Anleggets produksjonskapasitet med begge produksjonslinjene i drift er rundt 185 000 tonn per år. Ved full produksjon på anlegget sysselsetter rundt 340 personer. I dag arbeider rundt 250 personer på Søral.
De nye kraftkontraktene vil ikke umiddelbart føre til produksjonsøkning på Søral.
- Med fornyet kraftinndekning vil vi fortsette produksjonen med en linje frem til eierne og styret bestemmer noe annet, sier Sævartveit ved Søral. - Kraftkontraktene gir mulighet for økt produksjon på et senere tidspunkt, dersom markedssituasjonen bedrer seg. I mellomtiden vil vi fortsette arbeidet med å ytterligere redusere vår kostnadsbase og forbedre effektiviteten, sier han.
Søral er eid av Rio Tinto Alcan (50,0%), Hydro (49,9%) og andre (0,1%).
Kontakt: Stian Hasle, Mobil +47 97736022, E-post Stian.Hasle@hydro.com
Kontakt: Halvor Molland, Mobil +47 92979797, E-post Halvor.Molland@hydro.com
Endret 29.10.2012 09:56 av OldNick
|Og prisen de får kjøpe den av allmuen betalte CO2-sertifiserte subsidierte krafta er?
Pisses me off bigtime!
|Summary fra Citi-rapport
Norsk Hydro ASA (NHY.OL)
Alert: Key Takeaways from the Site Visit Day 1
Norsk Hydro is conducting an analyst site visit to its Brazilian assets. We highlight key outcomes from the presentation made by group CFO and the head of bauxite and alumina.
The company admits that the assets are not currently making enough cash to justify the price they paid to buy the assets but they are focusing more on longer term.
Operations - In October, Paragominas and MRN bauxite mines produced at nameplate capacity for first time. Using surface miners is twice as productive as traditional grab and fill machines. The company has 3 surface miners on site at Paragominas. Alumina production was 545kt in October. NHY believes its Alunorte product is the best quality alumina and brings energy savings for smelters and expects a premium for this in the long term.
Markets - Indonesian bauxite export ban has prompted the Chinese to start buying from the Atlantic market. NHY is hopeful that it will also see alumina sales from Atlantic into china. The company believes that most new alumina contracts are index based and not many long term contracts are being entered into.
Cost improvement program - Priority is to reduce 'manning' by c.20% over the next 12-24 months, increase technology and realise NOK 1bn improvement in 2-3 years. The company admits that manpower reduction will not be free of objections but also indicated that it engages well with the unions.
Regulatory - Not worried about tax regime as authorities are open to negotiations. New Brazil power tariffs are apparently very difficult to work out, so cannot yet quantify benefit to operations. On average, there could be 20% energy cost reduction but a more accurate estimate is possible only after further details are available.
Endret 07.11.2012 22:38 av OldNick
|Summary Citi-rapport fra Paraminas-gruven.
8 nov. 2012
Norsk Hydro ASA (NHY.OL)
Key Takeaways from Paragominas Mine Visit
We have been on a visit to Norsk Hydro's Brazilian Aluminium assets, which the company acquired in 2011. Here are our key takeaways from Paragominas Bauxite mine visit, which feeds the Alunorte refinery via a 244km pipeline, the first bauxite slurry pipeline in the world.
Product Quality - Paragominas Bauxite is of the Gibbsite type, which requires much lower energy to process at a refinery than Diaspore and Boehmite. Notably Gibbsite requires a temperature of around 145c to process into alumina, while diaspore and boehmite require up to 250c. While it is difficult to put an exact figure on it, management estimated that processing gibbsite could save up to $100/t (looks optimistic to us) and be 50% less capital intensive.
Sakser fra Wikipedia: Gibbsite
Gibbsite, Al(OH)3, is one of the mineral forms of aluminium hydroxide. It is often designated as γ-Al(OH)3 (but sometimes as α-Al(OH)3.). It is also sometimes called hydrargillite (or hydrargyllite).
Gibbsite is an important ore of aluminium in that it is one of three main phases that make up the rock bauxite. Bauxite is often thought of as a mineral but it is really a rock composed of hydroxide and oxyhydroxide minerals such as gibbsite, boehmite (γ-AlO(OH)), and diaspore (α-AlO(OH)), as well as clays, silt, and iron oxides and hydroxides.
Poenget er: Al(OH)3 løser seg opp ved lavere temperatur i NaOH (natron-lut) enn AlO(OH) i Bayerprosessen. Det betyr mindre energi for oppvarming, samt puming ved lavere trykk inn i utstyret.)
Growth and Optimisation - Paragominas produced at nameplate capacity of 9.9mt annualised in October. The company is mining two areas in one plateau known as M3 (9.9mt capacity). There is further expansion potential at the M5 plateau, which the group estimates would have 4.85mt capacity. To optimise existing capacity the mine is in transition from a more labour-intensive method with smaller equipment, to a more productive, mechanised and less labour intensive method. Notably this requires machines known as surface miners, of which there are 3 on site. The surface mining method achieves 700-800 tonnes of ore per hour vs. 400 tonne per hour through the conventional route. Studies are also underway for using long distance conveyor belts and 160-tonne trucks instead of the 40-tonne trucks currently in use. The crusher will require some adjustments to accommodate larger trucks transporting ore. This optimisation programme is expected to assist the group with its cost improvement programme for Brazilian operations, which includes a headcount reduction of 20% over the next 12-24 months.
Key Challenges - There is clear growth potential at Paragominas, however we do see some challenges. After a relatively straightforward mining and beneficiation process, the ore has to be turned into slurry to transport down the pipeline to Alunorte. As we mentioned, this is the world's first bauxite slurry pipeline and there appear to be some challenges surrounding slurry transportation; the pressure in the first half of the pipeline is too high and is increasing the rate of corrosion, which ultimately would decrease the life expectancy of the pipeline, which is intended to be 20-25 years. To mitigate this, the group is installing a second pumping station halfway along the pipeline, which should allow regulation of the pressure along the pipeline more effectively. The second pump station should be ready in 2013/2014.
Endret 13.11.2012 15:03 av OldNick
|Synd for Italia (kanskje), men bra for Al-markedet.
150kt primæraluminium ute av markedet.
Alcoa's Portovesme Al smelter closed
Nov. 7, 2012
Alcoa's Portovesme aluminium smelter in Italy has been completely closed, marking a key step in the company's schedule of capacity curtailments, a company executive said on Wednesday November 7.
The closure was completed last Friday, Chris Ayers, head of global primary products, said.
The smelter was slated for closure in a plan to reduce company global output by 12%.
The closure removes 150,000 tonnes of capacity, and accounts for most of the 240,000 tonnes of the company's European output slated for closure.
RUSAL expects China's aluminium demand to improve
* Q3 recurring net loss $76 mln vs f'cast $35 mln loss
* Q3 adjusted EBITDA $130 mln vs $705 mln a year ago
* Expects demand to pick up in Q4, lifted by China rebound
By Alison Leung (Reuters)
Nov 12, 2012
HONG KONG - Russia's United Company RUSAL Plc, the world's top aluminium producer, said it expected orders to pick up towards the year-end due to a rebound in China.
Tepid demand for aluminium in an oversupplied market has weighed on producers including Aluminum Corp of China Ltd . Prices have slumped 10 percent over the last 12 months and led RUSAL to report its biggest quarterly recurring net loss since its listing in 2010.
The outlook may improve from the final quarter of the year. RUSAL signalled a pick-up in China, the world's biggest consumer of aluminium, citing market speculation that the government will support infrastructure building and start stockpiling as it did in 2008 and 2009.
The company controlled by Russian billionaire Oleg Deripaska said it was optimistic thanks also to growing North American demand for the metal, used in drink cans, aircraft and iPads.
"This will be largely driven by a Chinese rebound in growth, a resilient USA automotive sector as well as new monetary stimulation steps taken by global central banks to support global economic growth and financial markets," RUSAL said.
RUSAL said China was expected to remain the largest growing market this year at 9 percent, followed by India at 7 percent and North America at 6 percent.
China said on Saturday it is effectively turning the corner on the economy and likely to meet its growth target for the year as a slowing trend had halted.
RUSAL revised down its Japanese consumption growth forecast for 2012 to 3 percent from 5 percent due to a drop in exports to Europe and the recent row between Tokyo and Beijing over disputed islands which it said had weighed on Japanese car makers.
Shares in the company, which have dropped nearly 60 percent since their IPO price of HK$10.80 in 2010, were flat in Hong Kong trade on Monday.
The market value of the company has declined by about 27 percent to $8.7 billion over the past 12 months.
EARNINGS LAG FORECASTS
Despite RUSAL's market-leading position, the weak operating environment has heaped pressure on the company, which is embroiled in a shareholder battle over its stake in Russian miner Norilsk Nickel.
Controlling shareholder Deripaska has resisted calls to dispose of RUSAL's 25 percent share in Norilsk Nickel to pay down debts at a time when aluminium markets are weak.
RUSAL has net debt of $10.85 billion, partly stemming from the purchase of the stake in 2008 for an estimated $14 billion. It has negotiated covenant holidays lasting until the end of 2013.
For the three months ended September, RUSAL posted a recurring net loss of $76 million, lagging the average forecast for a $35 million loss in a Reuters poll of nine analysts. That compares with a recurring net profit
|Fra en analytiker-rapport
FACING UP TO ALUMINIUM'S PHYSICAL CLIFF
- An end of aluminium financing in 2014 could sink prices by some 20% from forecasts
- Timing of unwind linked to rising market interest rates, not Fed announcements
- Around 8 million tonnes of metal could hit the market in space of three to six months
The aluminium market is facing a supply shock in 2014 when prices could drop by 20% or more in a very short period. We expect around 70% of on-warrant and off-warrant stocks, or about 8 million tonnes of metal tied up in financing deals, to come to the market around the middle of 2014. The trigger will be rising interest rates, which will make contango financing unprofitable.
Contango financing - buying cash metal at a discount, selling forward at a premium, then using the difference to cover the cost of storage, interest, and make a profit - has increased significantly since the global financial crisis. Low interest rates have caused investors to seek yields in alternative investment structures and financing metal remains a relatively low-risk opportunity. However, margins can rapidly shrink as costs, primarily interest and warehouse rents, go up.
The metal locked away in these deals could amount to around 8 million tonnes or 15%-20% of global supply. This would add to our estimated surplus of around 1.2 million tonnes for 2014. We reflect some of these risks in our price forecasts, which show a dip to USD2,182/t at the end of 2014, down from USD2,315/t at the end of the first quarter of that year.
However, those are end-quarter numbers and we see significant risks that prices could spike down below USD2,000/t should these trades unwind and the metal comes back to the market in 2014. Compared with current prices around USD1,950/t, a fall to USD2,000 does not seem too dramatic. But smelters today earn an additional physical premium of USD150-250/t on top of the London Metal Exchange (LME) price due to the limited availability of material. Even then, about a third of global smelters are operating at a loss.
The release of large amounts of metal will additionally undermine these premiums as material will be discounted by motivated sellers. Unhedged producers could find themselves in a difficult position coping with lower prices and no premium. They could be caught between loss-making output and the costly alternative of shutting down operations. We expect most producers will choose to tough it out, and continue to produce.
Of the two factors - rents and interest rates - that drive the economics of financing, we see interest costs as the key variable. Market interest rates will pre-empt any sign of a Federal Reserve move to withdraw the extraordinarily loose monetary policy introduced since 2008. These will be the spark for stockholders to exit the financing trade quickly, even though Fed fund rates may remain unchanged.
Costs of funds vary for these deals. For those with a better credit rating, costs of funds are around 1%, while lower rated participants may pay 2%. Assuming a cost of funds of 2% per annum and an aluminium price of USD2,050/t, annual interest charges would amount to USD41/t of metal.
Rents also vary. Nominal warehouse rents have trended higher in recent years as more metal has accumulated in storage. The LME publishes maximum warehouse rents. In the case of aluminium they average 44.4 cents per tonne per day for 2012. However, warehouse operators offer discounts for material booked for extended periods of time. Data on how much rent stockholders actually pay is elusive and will vary depending on the participant, but we can make some credible assumptions. LME storage, if part of a longer term agreement, can cost 12 cents to 15 cents per tonne per day or USD44 to USD55 per tonne per year.
Based on a 2% cost of funds, total costs excluding incidentals, are USD85/t to USD96/t. Assuming the cash to 12-month spread remains steady at USD100/t and no change in rents, a run up in market interest ra