Global Alumina Scenario

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As Alumina Prices are deviating from LME 3M Pri.Aluminium, this presentation aimed to give birds view on Global Alumina Markets

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Global Alumina Scenario

  1. 1. Global Alumina Market A Small Note by MSR Prasad, Commodity Professional, India
  2. 2. Agenda of the presentation <ul><li>Bauxite - Reserves & Growth </li></ul><ul><li>Alumina – Matured Markets </li></ul><ul><li>Alumina – Emerging Markets </li></ul><ul><li>Alumina – Surplus Generators </li></ul>
  3. 3. Global Bauxite Reserves <ul><li>Global Bauxite Reserves (Exploitable) registered a CAGR of 1.04 percent during 2000~2010 & stand at 28.0 bln tons </li></ul><ul><li>Globally Reserves are concentrated, Africa ~ 30 percent (Guinea), Oceania ~ 20 percent (Australia), Latam ~ 20 percent (Brazil, Venezuela, Suriname & Guyana) and Asia ~ 20 percent (China & India) </li></ul><ul><li>Bauxite Reserves & Primary Aluminium smelters make Latam, Ocenia and Africa major natural exporters, while North America, Europe and Asia major natural importers </li></ul><ul><li>Besides Reserves, smelting capacity, Policy, investments & Power costs play a crucial role in Alumina production, consumption and trade </li></ul>
  4. 4. Alumina Scenario – Matured Markets <ul><li>Over the last decade, North America Alumina Capacity & Production remained fairly stable (hovering along 6 mln ton mark), while Consumption eased to 9.3 mln t </li></ul><ul><li>Competition from Emerging Economies for final products and Loss of Capacity at Canada let N America Alumina market to remain in deficit </li></ul><ul><li>During the last decade, Europe Alumina Capacity & Production marginally increased till 2005, later remained largely stable, while Consumption held steady along 16.0 mln t </li></ul><ul><li>Limited capacity additions (at N.America) and lower operating rate during 2009~2010 at Europe (after math of Credit Crisis) resulted both the region remain net imported through H1-11 </li></ul>
  5. 5. Alumina Scenario – Emerging Markets <ul><li>Emerging Asia (including China) showed remarkable growth during the last decade WRT Alumina Capacity, Production & Consumption (mostly outpacing the other two) </li></ul><ul><li>Urbanization, Policy towards industry & infra and Globalization made Emerging Asia a centre for Manufacturing, Trade as well as Consumption </li></ul><ul><li>Other than Emerging Asia, parts of Eastern Europe, Middle East (buoyancy from Energy prices) and South Africa resulted Rest of the World Alumina Consumption also to outpace Capacity & Production </li></ul><ul><li>Run away consumption, limited investments into exploration and inefficiency resulted Emerging Asia a net importer and price driver during the last decade </li></ul>
  6. 6. Alumina Scenario – The Surplus Generators <ul><li>Abundant Bauxite reserves & limited Smelting & Refining Capacity make both Ocenia & Latam traditional exporters of both Bauxite & Alumina </li></ul><ul><li>Australia saw a steady growth in Alumina Capacity & Production via limited energy & stringent environmental legislations </li></ul><ul><li>Other end, huge investments (both home & from abroad) into mine exploration let Latam Alumina Smelting Capacity & Production to remain strong during the last decade </li></ul><ul><li>Scant energy resources, increasingly hostile environmental regulations, price volatility shall keep the Alumina Capacity at above regions steady in the times to come </li></ul>
  7. 7. Global Alumina – Production Costs
  8. 8. Alumina Pricing <ul><li>Globally, Alumina prices were quoted relative to LME 3M Aluminium prices generally between 11~14 percent of Primary Aluminium </li></ul><ul><li>Relative pricing, fragmented Seller Market and environmental regulations let the Global Alumina Capacity under invested for long </li></ul><ul><li>Off late Major industry players are moving toward index based Pricing, which is expected to reflect the Actual costs of Production </li></ul><ul><li>As seen from the above Chart, Global Avg Alumina price broke the 11~14 percent band during the times of increased costs (During 1999, 2004~2007 and since H2-2010) </li></ul>
  9. 9. Alumina Global Balance & Prices <ul><li>Global Alumina Production (reported by IAI) and Consumption (Calculated from IAI) continued to show marginal surplus over the last few years </li></ul><ul><li>However, on a quarterly basis the Market Balance remain fluctuating and there by helping the prices to oscillate & Post H1-10, Global Alumina Prices continued to exhibit upward trend despite surplus </li></ul><ul><li>Major players moving to index pricing, steady up tick in energy & other input prices kept the Alumina on northward path </li></ul><ul><li>Going forward one can look for increased firmness, volatility and An Average price of USD 400~410 per ton (up +5.3 ~ 7.9 percent) for 2011 </li></ul>
  10. 10. Thank You ! Comments @ prasad.mangena@gmail.com

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