Alumina is having a turbulent year.
The intermediate product sitting between bauxite and refined metal on the aluminium production chain doesn't normally grab the headlines.
But it did in April, when the spot price doubled to over $700 per tonne as the market reacted to US sanctions on Oleg Deripaska and his Rusal empire.
The sanctions threw into doubt the future of Rusal's Aughinish alumina plant in Ireland, threatening a second blow to global production after the part closure of the Alunorte refinery in Brazil.
Aughinish won a reprieve as the US Administration extended the sanctions deadline and the betting is that a political deal to lift the sanctions altogether will be achieved very shortly.
However, while the aluminium price is now trading back at pre-sanctions levels, that of alumina isn't.
Alunorte remains part suspended and Chinese alumina refineries have started cutting production.
The latter may be a sign of things to come, promising further turbulence ahead.
When the United States announced the imposition of sanctions on Rusal on April 6, it was the aluminium price that reacted first. London Metal Exchange (LME) three-month metal rocketed from $2,000 per tonne to a seven-year high of $2,718 in the space of a couple of weeks.
It took around a week for alumina to follow because that's how long it took the market to unravel Rusal's internal supply chains.
On paper the company looks vertically integrated with its own bauxite mines, alumina refineries and aluminium smelters.
The reality is a bit more complicated.
Aughinish, it turns out, largely runs off bauxite supplied by Rio Tinto, which in turn takes a good part of the plant's two million tonnes of annual production to feed aluminium smelters in Europe.
Rio Tinto declared force majeure on supplies of alumina to some customers on April 18, which is when the alumina price exploded higher.
It turned out to be only a notional force majeure since the extension of the sanctions deadline to October 23 meant no interruption to actual deliveries, the company said in its Q2 operations report.
But even the threat was enough to trigger a panic in the physical alumina market, which was already trying to adjust to the loss of half the output at Hydro's Alunorte refinery.
Alunorte, the world's largest single alumina plant with annual capacity of 6.3 million tonnes, was ordered partially to curtail operations by a Brazilian court in February on environmental grounds.
The operational wind-down and any associated spot market buying by Hydro was still happening when the sanctions shock hit the market.
Alunorte is still operating at only 50 per cent of capacity.
This explains why the CME's front-month aluminacontract , indexed against S&P Global Platts' assessment of the spot market, is currently valued at $481 per tonne, compared with under $400 at the start of the year.
Indeed, Hydro has dampened expectations of any quick fix with the Brazilian authorities.
"The process to resolve the situation in Brazil is challenging and has taken longer than expected," said chief executive Svein Richard Brandtzaeg. "The timing for resuming full production remains uncertain."
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The company's best guess is that a restart will take place sometime between October this year and the middle of next year.
The uncertainty hanging over such a big component of global alumina supply is evident in the CME alumina contract's forward curve.
The price of alumina for three months forward is currently sitting at around $515, higher than it was at the peak of the Rusal sanctions scare.
That's also because the market has something new to worry about in the form of falling Chinese alumina production.
State-owned Chalco warned early July that around 770,000 tonnes of its annual alumina capacity would be subject to "flexible" output arrangements. Or output curtailments, as everyone else would call them.
A day later another producer, Luoyang Heungkong Wanji Aluminium, said it too would be cutting output to the tune of an annualised 680,000 tonnes.
Others have followed.
Five major Chinese refineries have now significantly cut output, according to specialist research house AZ China.
That raises the prospect of China, which has historically tended to be a net importer of alumina, having to tap the international market for more material precisely at a time when there is little or no supply slack.
The problem for the alumina market is that these Chinese cuts are down to an environmental crackdown that is only going to get more punitive in the weeks and months ahead.
Beijing's "blue skies" war on smog has embraced the entire aluminium production process chain in China but it's only recently that environmental investigators have turned their attention to the bauxite mines that feed the chain.
Bauxite operators in Henan province have already been hit and the crackdown is in full swing in Shanxi province, causing a shortage of raw material that in turn is forcing the shuttering of alumina capacity.
"This is just the beginning of the process," according to researchers at Wood MacKenzie. The outlook is for further closures to "exacerbate bauxite shortages, which in turn could lead to further refining cuts".
Alumina refineries are themselves also likely to be directly impacted by the coming winter heating season restrictions, particularly since the government's latest three-year plan to reduce air pollution vastly expands the targeted area and extends it beyond last year's November-March time frame.
This year the curtailments will kick in from September and last year's "26+2" target zone around Beijing and Tianjin will be expanded to include the Yangtze River Delta and the Fenwei Plain, comprising parts of Shaanxi, Henan and Shanxi provinces.
Since around 70 per cent of China's alumina capacity is located in this year's targeted areas, the impact is going to be much greater than last year.
Throw in the intensifying scrutiny of the bauxite sector and the pressure on alumina refineries to switch from coal to gas power over the winter months and, to quote WoodMac, "there could be more chaos to come".
They mean chaos in China's giant aluminium sector.
But more chaos in China will easily translate into more price chaos in the international alumina market.
Reuters
If you go
The Flights
Emirates and Etihad fly direct to Johannesburg from Dubai and Abu Dhabi respectively. Economy return tickets cost from Dh2,650, including taxes.
The trip
Worldwide Motorhoming Holidays (worldwidemotorhomingholidays.co.uk) operates fly-drive motorhome holidays in eight destinations, including South Africa. Its 14-day Kruger and the Battlefields itinerary starts from Dh17,500, including campgrounds, excursions, unit hire and flights. Bobo Campers has a range of RVs for hire, including the 4-berth Discoverer 4 from Dh600 per day.
UAE currency: the story behind the money in your pockets
Results:
Men's wheelchair 800m T34: 1. Walid Ktila (TUN) 1.44.79; 2. Mohammed Al Hammadi (UAE) 1.45.88; 3. Isaac Towers (GBR) 1.46.46.
How much sugar is in chocolate Easter eggs?
- The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
- The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
- The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
- The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
- The Cadbury Creme Egg contains 26g of sugar per 40g egg
Summer special
THE%20HOLDOVERS
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Test
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Star rating: 2/5
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COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Most F1 world titles
7 — Michael Schumacher (1994, ’95, 2000, ’01 ’02, ’03, ’04)
7 — Lewis Hamilton (2008, ’14,’15, ’17, ’18, ’19, ’20)
5 — Juan Manuel Fangio (1951, ’54, ’55, ’56, ’57)
4 — Alain Prost (1985, ’86, ’89, ’93)
4 — Sebastian Vettel (2010, ’11, ’12, ’13)
Killing of Qassem Suleimani
The biog
Hometown: Cairo
Age: 37
Favourite TV series: The Handmaid’s Tale, Black Mirror
Favourite anime series: Death Note, One Piece and Hellsing
Favourite book: Designing Brand Identity, Fifth Edition
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
RESULTS
2pm: Handicap (PA) Dh40,000 (Dirt) 1,200m
Winner: Najem Al Rwasi, Fabrice Veron (jockey), Ahmed Al Shemaili (trainer)
2.30pm: Handicap (PA) Dh40,000 (D) 2,000m
Winner: Fandim, Fernando Jara, Majed Al Jahouri
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Winner: Wakeel W’Rsan, Richard Mullen, Jaci Wickham
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4.30pm: Sheikh Ahmed bin Rashid Al Maktoum Cup (TB) Dh200,000 (D) 2,000m
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THE SPECS
Engine: 6.0-litre, twin-turbocharged W12
Transmission: eight-speed automatic
Power: 626bhp
Torque: 900Nm
Price: Dh1,050,000
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The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Company%20Profile
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Where can I submit a sample?
Volunteers can now submit DNA samples at a number of centres across Abu Dhabi. The programme is open to all ages.
Collection centres in Abu Dhabi include:
- Abu Dhabi National Exhibition Centre (ADNEC)
- Biogenix Labs in Masdar City
- Al Towayya in Al Ain
- NMC Royal Hospital in Khalifa City
- Bareen International Hospital
- NMC Specialty Hospital, Al Ain
- NMC Royal Medical Centre - Abu Dhabi
- NMC Royal Women’s Hospital.
