IAI: Primary aluminum production rises in January

Here is the breakdown by region:

Africa – The effects of the orderly closure of the Mozal smelter in Mozambique are beginning to have a telling effect on production in the region. We should see a minor bump in the February numbers once the new 120,000-ton-per-year Angolan smelter starts reporting its data. It adds 10,000 ton/month once at full operational capacity, which will take a few months to fully energize all the pots.

North America – Early signs of Mt. Holly restart may be starting to creep into the numbers.

South America – Marked decline in output here, which we would surmise is something happening in Brazil, as no reports of issues in Argentina. Venalum in Venezuela is not a reporting member to IAI, so we have no visibility as to whether the political upheavals had any impact.

Asia ex China – Some of the new projects in Indonesia are beginning to energize pots.

Europe, including Russia – Continued restarts in Germany, Norway, and Spain are showing up in the numbers. Recovery operations at Century’s Grundartangi smelter are also contributing to daily output gains.

Oceania – Alcoa had previously provided guidance that it was looking to crank Portland to 95% of nameplate capacity. Their Q4 earnings call showed some progress with idled capacity down to 28,000 tons/year from 32,000 tons/year in November.

Gulf Region – We continue to see operational excellence in this area, and the 0.6% increase may be attributable to faster pot relining and higher metal yields. Despite the outbreak of hostilities with Iran, we do not anticipate any production would be curtailed. Inventories would be built pending resumption of shipping through the Strait of Hormuz.

China – China inches ever closer to its 45 million ton cap, now running at an annualized rate of 44.57 million tons. We will likely see this threshold reached after the conclusion of the Chinese New Year in February.

Why this matters

There continues to be a tendency amongst people to say these numbers are “ho-hum,” but they are important to monitor for clues about regional excursion and creep. Some things to watch during February:

• Africa – Mozal closure will accelerate and drop the regional numbers, with minor offsets from the new Angola smelter.
• North America – Mt Holly’s 50,000 ton/year restart will eventually deliver just over 4,000 tons/month of incremental supply. That will not fully show up until the third quarter.
• South America – We need to see if the plunge in daily outputs repeats, which would indicate a major excursion with Brazil or maybe Argentina.
• Asia ex China – Indonesia ramp up still quickening, and we should see higher rates.
• Europe – Century Iceland should be gaining traction on its restart, and daily rates ought to reflect this.
• Oceania – Not looking for much change here.
• China – The cap should be hit in February until Chinese New Year stunts productivity.