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Azovstal plant news, worldwide aluminium woes, Japan brings steel home

Mariupol looks like it might soon be in Russian hands. Ukrainian fighters are making moves to abandon the massive steel plant where hundreds of them have held out despite relentless bombardment by Russia. Ukrainian officials say the soldiers, who’ve been sheltering there for over two months, have fulfilled their combat mission. The evacuation of troops has begun and the Supreme Military Command has ordered the commanders of the units at Azovstal to save the lives of their personnel. 

 

Azovstal plant news, worldwide aluminium woes, Japan brings steel home

by | May 23, 2022 | Aluminium, Aluminium Alloy, Aluminium News, Aluminium Price Trends, Industry News, Metal News, Metal Prices

Mariupol looks like it might soon be in Russian hands. Ukrainian fighters are making moves to abandon the massive steel plant where hundreds of them have held out despite relentless bombardment by Russia. Ukrainian officials say the soldiers, who’ve been sheltering there for over two months, have fulfilled their combat mission. The evacuation of troops has begun and the Supreme Military Command has ordered the commanders of the units at Azovstal to save the lives of their personnel. 

The war, along with covid, supply chain issues and sharp fluctuations in demand, is affecting our world on many levels. Here’s the news from your trusted aluminium stockists and metal suppliers. 

EU aluminium deficit affects inventories  

Reuters reports on the aluminium inventories in London Metal Exchange warehouses, which have plummeted to the lowest level in almost 17 years.  LME aluminium stocks have dropped by 72% since March 2021, now at their lowest since late 2005. They’re predicted to drop even more as aluminium supplies continue to leave the LME system for the EU, where the metal is already scarce. Add record breaking EU energy prices to the mix and the cost of making the metal is shooting up fast. Western Europe alone consumes around 10% of the world’s aluminium supply, an estimated 70 million tonnes this year alone. 

Experts reckon aluminium supply risks will remain worryingly high. Worse still, the warrant stock available is the lowest on record and likely to fall more. At the same time benchmark aluminium prices on the LME reached a one-week high of $2,865 per tonne, and during April primary aluminium output in China achieved a record high of 3.36 million tonnes thanks to an easing of the brakes on power production letting smelters do more. 

The BBC highlights aluminium’s ongoing issues 

A report on the BBC website discusses why the volatility of aluminium prices matters. They take, as an example, a small craft brewery in Nevada, USA, where ‘thousands of stockpiled aluminium cans sit waiting to be filled’. The CraftHaus Brewery has been forced to hoard the cans, collecting together three months’ supply as ‘an insurance policy’. They used to keep a stock of a month’s worth, but the turbulent aluminium market has them worried their can suppliers won’t be able to meet the required delivery dates. 

The price of the aluminium drinks cans has shot up by 18% so far, and the company is also struggling with soaring delivery costs. Russia’s invasion of Ukraine has tightened supplies further, as well as pushing the price of aluminium higher still. In a world where many aluminium buyers are boycotting Russian aluminium, and pre-war energy prices were already rocketing, things are looking very uncertain. 

All this uncertainty is borne out by the actions of the US firm Alcoa, which has decided to shut down one of its smelting plants in Spain for two years thanks to ‘exorbitant energy prices’. They’re not the only ones. Some say Europe will lose around 900,000 tonnes of primary aluminium production this year alone. China’s aluminium ingot social inventories across eight major markets is also down. 

Is Japanese steel coming home? 

One thing you can do when supply chains are wrecked and uncertainty is high? Do it yourself. Investing.com reports on Japan’s manufacturers, who are becoming increasingly keen to move offshore operations back home. Apparently a rapidly weakening yen, global supply chain nightmares, geopolitical risks and changing wages are at the heart of the change.

It looks like there’s a run of Japanese companies deciding to move their operations out of China, south east Asia, and Russia in favour of building new steel plants in Japan. As one expert said, “The yen has fallen so much that Japan’s trade balance won’t be back in the black. Under such circumstances, companies judge it’s better to do manufacturing in Japan.” A hike in demand suggests it’s a good idea, with orders for steel used in construction rising 10% so far during 2022 compared to a year ago. 

Keeping calm and carrying on

We’re keeping a close eye on the situation. We’ll continue to keep you posted. In the meantime walk this way for 7075 aluminium plate UK and all sorts of popular aluminium products. As brass suppliers we keep an eye on that market too, and the same goes for steel. Keeping a constant finger on the pulse of the world’s metals sector means you get the best service, fair prices, and the metals you need. 

Please complete the enquiry form located on this page, call +44 (0) 330 223 2653 or email us to discover how Metalex could be supplying you with premium metal products and professional metal processing services.

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