Metalex products – Focus aluminium – Predictions for 2020

We all operate in a global economy these days. No company, person or country is an island, Metalex included, and global issues are having an impact in all sorts of ways, some expected and others unexpected.

Take the outlook for aluminium prices in 2020. According to the chief executive of Saudi Arabian Mining Co. the outlook for this year is “obviously more negative” thanks to the outbreak of coronavirus plus a surge in supply from China.

At the same time the impact of climate change is being felt in our sector. When Alcoa Corp’s Australian aluminium smelter was hit by a power cut recently the culprit was a tripped transmission line, which went down thanks to ‘soaring temperatures’ in Australia’s fire-destroyed south east. The outage resulted in a ‘separation between Victoria and South Australia’ at the Heywood Interconnector. It also interrupted supplies at the Portland aluminium smelter, which lost power to both potlines thanks to an external fault whose cause is still unknown.

Here are some more of the key issues affecting aluminium prices in 2020, which could be impacting Aluminium suppliers like us, and Aluminium buyers like you, in 2020.

Potential aluminium supply disruptions in West Africa and the Gulf

According to Mining Review and Wood Mackenzie, potential supply disruptions in the Gulf and West Africa will drive the fortunes of Aluminium in 2020. Supply issues might also impact the industry as Green Aluminium starts to have an impact.

Edgardo Gelsomino, Wood Mackenzie Head of Aluminium, believes there are several key things to look out for in the coming year. Aluminium production might be affected by escalating tensions between the Middle East and USA. The rest of the world could suffer production cuts. Smelters could end up making more Aluminium ingot than value-added products. China’s ability to absorb the ex-China alumina surplus will be a vital factor. And Guinea politics could begin to impact seaborne bauxite supplies.

In his words: “A blockade of the strait of Hormuz has the potential to disrupt the flow of region’s aluminium and, therefore, prevent producers from receiving critical raw materials. Materials shipped through the straight could also be hit by higher insurance or shipping costs. Except for Saudi Arabia and Oman, given their lower reliance on the strait of Hormuz, all other operations are vulnerable.”

Super Bowl hangs its hat on aluminium cups

Some initiatives are designed to increase the use of aluminium, so will have an effect on demand. Take the Super Bowl competition. It and enormous cups of fizzy drink go together like strawberries and cream…. or at least they used to. But times are changing in line with environmental concerns.

As reported by the BBC, the 2020 Super Bowl championship will be cutting right back on plastic by introducing aluminium cups for American football fans attending the event.

Miami’s Hard Rock Stadium will replace its plastic cups with 50,000 aluminium ones, and fans will also be able to buy water in cans instead of plastic bottles. After the competition the aluminium cups will stay for good, since the Stadium is determined to cut 99.4% of its single-use plastic this year.

The CRU World Aluminium Conference

The CRU World Aluminium Conference takes place in London from 20th to 21st April this year. This is the event’s 25th year. It’s set to attract more than 240 influential senior industry players from 40 countries who will be discussing the key issues facing the industry.

CRU estimates electric vehicles will represent 25% of the automotive market by 2030, but the impact on aluminium isn’t yet completely clear. CRU will explore this and many other subjects as well as looking into competition from steel, the future of extrusions, rolled and cast aluminium, plus a good look at the crucial primary vs secondary issue.

There will be a keynote session on sustainability and technical innovation as well as talks about the Chinese aluminium sector, the global aluminium market, downstream sustainability, the US elections, recycling, raw materials, pricing and market outlooks.

As the world changes we continue to be the Aluminium supplier you need

We’ve been in this game for a long time and we’ve seen all manner of changes. Whatever happens out there we keep on providing people like you with top quality metal supplies at fair prices. If you want metal, let’s talk.