COMMENT :
Following melt down aluminium outlook extremely bearish
Potential issues over the financing of aluminium metal inventory as the year-end approaches might force several short position holders decide to deliver against their positions rather than roll them over which may in turn result LME warehouse stocks may rise much further over the coming weeks. This might see aluminium price touching much lower levels. Near record-high risk aversion levels as measured by the VIX index, and meaningful but insufficient aluminium output cuts will keep pushing prices lower. For the immediate effect aluminium prices might go down further following the market slump. And definitely, the outlook for slightly longer time period is extremely bearish.
NEWS CORNER
LME achieves another year of record volume
The London Metal Exchange (LME) achieved another record year in 2008 with over 113 million lots traded, representing a year-on-year increase of nearly 22%. This was the fourth consecutive year of record volumes for the Exchange, up from the 93 million lots traded in 2007, which itself was an increase of 7% on 2006. 2008 annual volume represented some $10.24 trillion in turnover, an increase of 7% on 2007.
LME aluminium inventory reached 15-year high on drastic decline of demand
The continuous demand slump of the base metal seems to have wrecked all the plans of the aluminium producers across the globe. Inventory levels on the London Metal Exchange (LME) that have reached record highs in the past four months are becoming a serious concern for the traders of the base metal. The high inventory levels, falling prices and worsening market conditions prompted production cutback of the metal and delaying or stalling of capacity expansion plans, as an immediate response in the supply-side, by many of the international players in the aluminium business.
SPECIAL COVERAGE
Vedanta Resources affirms share buyback not to affect organic growth plans
The year 2008 proved to be another excellent year for Vedanta Resource Plc.The company recorded a group revenue of $8203.7 million in FY2008, reflecting a 26.2 pc increase compared to last financial year, as published in the company’s Annual Report 2008. Notably, the company’s aluminium business delivered highperformance in 2008, achieving a 12.8% increase in aluminium production (at 396,000 tonnes), as against the previous year. The company plans to increase aluminium production by 28% to 500,000 tonnes in 2009. In January, the company unveils its plans for this year, somewhat like New Year resolutions, that include resumption of the share buyback program, reduction of capital expenditure and completion of the projects it undertook, Orissa in particular, on time.
COMPANY PROFILE
Nalco aims unaltered aluminium production target in 2009
In January, National Aluminium Company (Nalco), a ‘Navratna’ PSU of India, announced that the company will produce 3.6 lakh tonnes of aluminium for the fiscal year ending March 2009, the same level produced last year, on steady annual domestic demand growing at a comfortable rate of around 7- 8%. Last year, Nalco produced the highest-ever aluminium and 15.75 lakh tonnes of alumina, despite weak demand worldwide and record-low aluminium prices on London Metal Exchange (LME). In addition, the company embarked on an ambitious growth plan last year, worth around Rs40,000 cr for the next five years, which includes refinery, smelter and power projects in the country and abroad.
METAL FOCUS
Chinese copper imports rose despite weak demand
In December 2008, data released by General Administration of Customs on its website showed an upsurge of imports of unwrought copper and semi-finished products in China by more than 30 pc, compared to the previous month, reports Reuters. The country’s refined copper imports reached a record high of 141728 tonnes in the month of November, an increase of 9.9 pc against the previous month.
Base metals reel under pressure with continued decline in price & volume, no sign of immediate relief
The magnitude of decline was relatively less sharp. The decline was primarily on back of weak market fundamentals and lack of demand in the market. Owning to the prolonged gloominess in the market, the entire base metals complex is occasionally showing some signs of reversal whenever there is a major positive cue but then it is being followed up by profit booking and prices are getting hammered down. And the factor that is maintaining a tremendous downward pressure is the rising inventories on major exchanges.
RAW MATERIAL
Surface Hardening of Medium Carbon Steels by Aluminization
Solid state surface aluminization of a medium carbon steel for roll applications is investigated. The processing temperatures range between
500°C and 700°C, and the diffusion time varies from 2 to 6 hours. The structures, phases, and mechanical properties of the coating layers
are studied. The thickness of the coating layers are formed in the range of 20~90um. The activation energy for growth of coating layer is
approximately 30.1 KJ/mole. The coating layer consists of two major phases. The Fe2Al5 phase is formed on the surface, while a solid solution
with Fe3Al structure is formed at the interface between surface Fe2Al5 layer and the substrate. The coating’s hardness is as high as Hv826
while keeping the substrate hardness at relatively high level.
CONFERENCE & EXHIBITION
Asia-Pacific Aluminium Conference (ALUCAST) 2008 successfully held to boost the gathering at bad times
ALUCAST 2008 also called Asia-Pacific Aluminium Conference 2008 was held successfully at Chennai during 11-14 December, 2008. It was inaugurated by Michael Boneham, President and Managing Director, Ford Motors India. In his inaugural speech he covered in detail about the future of the industry and Ford India’s plans and strategies for Indian and global markets. Though the industry is passing through a critical phase, Boneham’s optimistic inaugural address gave a boost to the gathering who heard him with rapt attention. Later he inaugurated the exhibition as well. KS Sripathy, Chief Secretary, Govt. of Tamil Nadu, lighted the ‘kuthuvilakku’ and addressed the gathering.
bauma 2010 - Preparations in full swing
Preparations are progressing very nicely for the next bauma in 2010, the 29th International Trade Fair for Construction Machinery, Building Material Machines, Mining Machines, Construction Vehicles and Construction Equipment. The deadline for exhibitor registration is 31 March 2009 and many applications are coming in from all over the world. "Already there has been a very good response from companies wanting to exhibit, and we seem to be at about the same level with registrations as we were for the record event in 2007," is how Exhibition Director Georg Moller summed up the
situation so far.
TECHNOLOGY / PROCESS REVIEW
Hazelett® Twin-belt Strip-casting : Expanded Process Capabilities
The processes currently used for the production of high volumes of aluminium strip are the DC (direct chill) process with conventional hot mill and the continuous casting processes, which include the twin-roll casters and the twin-belt casters. The DC process is the most widely used and produces high-quality strip of almost any alloy; it is also capital intensive, consumes a lot of energy, and is characterized by relatively high conversion costs.
Retrofit of HSS Pots to Prebake – Hirakud Experience
Hindalco’s Hirakud smelter (erstwhile INDAL) was commissioned in 1959, with an installed capacity of 24,000 TPA using Alcan’s 50kA, HSS design with pots in end-to-end configuration. The smelter was installed adjacent to Hirakud dam for sourcing energy and also has its own carbon plant and casting plant. Alumina for the smelter is being obtained from our refinery at Muri, Jharkhand (around 400kms,by rail) and the finished products (rolling ingots, cast coils and ingots) despatched to our sheet plants near Mumbai and Kolkata.
Niobium, Molybdenum,Rhenium Refractory Metals and their alloys
The refractory metals are conveniently described as those which, first of all, melt at temperatures well above the melting points of the common alloying bases, iron, cobalt, and nickel. Second, it seems appropriate to consider the refractory metals as those which have higher melting points than do titanium and zirconium, which are used chiefly at intermediate temperatures. On the other hand, chromium is usually classed as a refractory metal.
Reducing Environmental emissions and Operating Costs in Aluminium Cold Rolling
One of the greatest and most demanding challenges that confront industry today is adhering to the applicable waste and emission regulations. They key to meeting these challenges is striking the balance between business and the environment.
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