Investing in Aluminium

Aluminium is an extremely important metal in the world economy. The global use of aluminium exceeds all other metals except iron. It is the second most abundant metallic element in the Earth's crust after silicon, yet it is a comparatively new industrial metal that has been produced in commercial quantities for just over 100 years. It weighs about one-third as much as steel or copper; is malleable, ductile, and easily machined and cast; and has excellent corrosion resistance and durability. Measured either in quantity or value, aluminum's use exceeds that of any other metal except iron, and it is important in virtually all segments of the world economy. Some of the many uses for aluminum are in transportation (automobiles, airplanes, trucks, railcars, marine vessels, etc.), packaging (cans, foil, etc.), construction (windows, doors, siding, etc), consumer durables (appliances, cooking utensils, etc.), electrical transmission lines, machinery, and many other applications. Aluminum recovery from scrap (recycling) has become an important component of the aluminum industry. A common practice since the early 1900's, aluminum recycling is not new. It was, however, a low-profile activity until the late 1960's when recycling of aluminum beverage cans finally vaulted recycling into the public consciousness. Sources for recycled aluminum include automobiles, windows and doors, appliances, and other products. However, it is the recycling of aluminum cans that seems to have the highest profile.

Domestic Production and Use: In 2010, five companies operated nine primary aluminum smelters; six smelters were closed the entire year. Demolition of two smelters that had been idle for several years was started in 2010. Based on published market prices, the value of primary metal production was $3.99 billion. Aluminum consumption was centered in the East Central United States. Packaging accounted for an estimated 31% of domestic consumption; the remainder was used in transportation, 28%; building, 14%; electrical, 9%; machinery, 7%; consumer durables, 7%; and other, 4%.

Recycling: In 2010, aluminum recovered from purchased scrap was about 2.7 million tons, of which about 59% came from new (manufacturing) scrap and 41% from old scrap (discarded aluminum products). Aluminum recovered from old scrap was equivalent to about 24% of apparent consumption.

Import Sources (2006–09): Canada, 60%; Russia, 11%; China, 5%; Mexico, 3%; and other, 21%.

Events, Trends, and Issues: During the first half of 2010, production from domestic primary aluminum smelters had stabilized after cutbacks made during 2008 and 2009 in response to price drops in the second half of 2008. Production from a smelter in New Madrid, MO, reached full capacity in the second quarter of 2010 after partially closing as a result of an electrical failure in January 2009. Work on an expansion project resumed at the smelter in New Madrid that would increase capacity to 266,000 tons per year from 250,000 tons per year by yearend 2013. Work continued on an expansion project at a smelter in Massena, NY, which would increase production capacity to 148,000 tons per year from 125,000 tons per year. Demolition of smelters in Frederick, MD, and Badin, NC, were announced after the owner of both smelters was unable to obtain favorable power contracts. By the beginning of the fourth quarter of 2010, domestic smelters operated at about 55% of rated or engineered capacity.

The United States continued to be reliant upon imports in 2010, as domestic primary production remained at significantly lower levels than in 2008, and exports continued to decline. Canada, China, and Russia accounted for about 40% of total U.S. imports. U.S. exports decreased by 30% in 2010 compared with the amount exported in 2009. China, Canada, and Mexico, in descending order, received approximately 40% of total U.S. exports.

The monthly average U.S. market price for primary ingot quoted by Platts Metals Week ranged between $0.934 per pound and $1.109 per pound throughout 2010. Prices on the London Metal Exchange (LME) followed the trend of U.S. market prices.

World primary aluminum production increased in 2010 compared with production in 2009, mainly as a result of starting new smelters and restarting smelters that had been shut down in 2008 and early in 2009. New smelters and restarted smelters were mainly in China, Qatar, and the United Arab Emirates. Smelters in Norway that shut down production during midyear 2009 remained closed in 2010. World inventories of metal held by producers, as reported by the International Aluminium Institute, increased through the end of August to about 2.4 million tons from 2.2 million tons at yearend 2009. Inventories of primary aluminum metal held by the LME worldwide decreased during the year to 4.4 million tons at the end of September from 4.6 million tons at yearend 2009.

World Resources: Domestic aluminum requirements cannot be met by domestic bauxite resources. Domestic nonbauxitic aluminum resources are abundant and could meet domestic aluminum demand. However, no processes for using these resources have been proven economically competitive with those now used for bauxite. The world reserves for bauxite are sufficient to meet world demand for metal well into the future.

Substitutes: Composites can substitute for aluminum in aircraft fuselages and wings. Glass, paper, plastics, and steel can substitute for aluminum in packaging. Magnesium, titanium, and steel can substitute for aluminum in ground transportation and structural uses. Composites, steel, vinyl, and wood can substitute for aluminum in construction. Copper can replace aluminum in electrical applications.

Aluminium Producers
Alcoa (NYSE: AA)- - The world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities.
Alcan (NYSE: AL)-
Aluminij dd. Mostar - Bosnian aluminum producer
American Elements - - Aluminum oxide, aluminum metal, aluminum ammonium sulfate, aluminum chloride, aluminum fluoride, aluminum isopropoxide, aluminum nitrate, aluminum phosphate, aluminum potassium sulfate, and aluminum sulfate. Also alloys of aluminum with scandium and yttrium.
Anrak Aluminium
Ashapura Minechem
Central European Aluminum Co. - Podgorica smelter in Montenegro
Century Aluminum (NASDAQ: CENX) - - North American aluminum
Columbia Falls Aluminum Co. (CFAC)
Emirates Aluminium Ltd. - partnership between Dubai Aluminium Co. and Mubadala Development Co.
Glencore Interantional AG (LON: GLEN) -
Grupa Kety SA - Polish aluminum producer
Hindalco (BOM: 500440) -
Imperial Aluminum
Kaiser Aluminum (NASDAQ: KALU) - Rolled aluminum, extruded aluminum, drawn aluminum, and forged aluminum
Marubeni Aluminium Australia Ltd.
National Aluminum Co. of India (Nalco) - Angul smelter
Noranda Aluminum (NYSE: NOR)
Norsk Hydro ASA (OSL: NHY) -
Ormet Corp (PINK: ORMT)
Qatar Aluminium Ltd. (Qatalum) - joint venture between Norsk Hydro and Qatar Petroleum Co.
Quanex Building Products (NYSE: NX) - Aluminum mini-mill and aluminum sheet cold finishing
Rio Tinto -
South Aluminium Co. (Salco) - Iranian aluminum producer
Tajik Aluminium Co. - aluminium producer in Tajikistan
Tredegar (NYSE: TG) - Aluminum extrusions
Trimet Aluminium AG
United Company Rusal -
Vedanta Resources
Vimetco NV - Slatina smelter in Romania

Chinese Aluminum Producers
Aluminum Corporation of China (NYSE: ACH) - - China's major aluminum producer.
Bosia Minerals Group
China Guodian Corp.
Gansu Aluminum Co
Guizhou Shuangpai Aluminum Co. - Lupanshui aluminum smelter
Henan Linfeng Aluminum Co.
Henan Shenhuo Group
Henan Wanji Aluminum Smelter Co.
Henkang Aluminium Co. - Yugang Longquan aluminum smelter in Henan Province
Huanghe Xinye Aluminum Co.
Meishan Qimingxing Aluminum Co.
Qinghai Yellow River Hydropower Aluminum Co.
Qingtongxia Aluminum Co.
Sanmenxia Tianyuan Aluminum Co.
Shanxi Guanlu Aluminum Co.
Sichuan Meishan Aostar Aluminum Co.
Xinjiang Tianlong Aluminum Co.
Yinhai Aluminum Co.

Aluminum price chart -

The Aluminum Association -

International Aluminium Institute (IAI) -

(wiki) - Aluminium on Wikipedia

Aluminium News
2011-07-13 - (bl) - Seven-month wait for aluminum drives LME to review rules
2011-07-13 - (bl) - LME aluminum stockpiles fall further as metal climbs in Japan
2011-07-12 - (bw) - Alcoa profit doubles as aluminum price gain outweighs costs
2011-07-12 - (bl) - Aluminum stockpiles extend declines, driven by U.S. withdrawals
2011-06-29 - (bl) - Aluminum makers seek U.S. action on China to counter weak yuan
2011-06-23 - (bl) - Rusal forecasts 2011 aluminum price at $2,600 to $2,800
2011-06-22 - (bl) - Rusal targets 30% China aluminum market in 5-10 years
2011-06-17 - (wsj) - Wall Street gets eyed in metal squeeze
2011-06-07 - (bl) - Aluminum fee to Japan at one-year high on post-quake demand
2011-06-03 - (cnbc) - World's biggest aluminum maker sees price at $2,700
2011-05-02 - (reu) - Hydro secures bauxite supply in $4.9 bln Vale deal
2011-05-02 - (mw) - Norsk Hydro to buy Vale's aluminum business
2011-04-29 - (bl) - Gulf international signs $1.6 billion aluminum smelter accord
2011-04-18 - (bl) - Zinc, aluminum premiums to climb on scarcity, Macquarie says
2011-04-15 - (bl) - LME aluminum, cobalt, tin margins to change, LCH Clearnet says
2011-04-12 - (bl) - Alcoa shares drop after aluminum producer's quarterly sales miss estimates
2011-04-12 - (bl) - Aluminum stockpiles in Japan drop for third month in March
2011-03-31 - (bl) - Aluminum smelters in China ramp up production as country ends power curbs
2011-03-14 - (bl) - Copper, aluminum use in Japan to drop as factories shut on power shortages
2011-02-11 - (wa) - Rising aluminium prices to drive Alcoa's value
2010-02-17 - (ft) - Speculation heats up aluminium trade
2011-01-30 - (bl) - Aluminum surplus to widen as idled smelters restart
2010-01-22 - (bbc) - Rusal launches $2.2bn share sale in Hong Kong
2007-09-11 - (sa) - Six ways to invest in aluminum: The most abundant metal in the world
2007-08-30 - (mf) - Chinese aluminum: All that shines?

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