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RE: Alcoa cuts increased to 615kmt to fight AL (& CPC?)glut

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#6460

Charles Randall
Participant

Here is update on Aluminum industry about cutbacks to fight deteriorating demand, growing glut  & growing inventory.  The LME aluminum inventory has topped 1.5 MM kmt (~1/2 years worth Australia’s production) despite ongoing cutbacks of 720 kmtpy in China, 265kmt now increased to 615 kmt by Alcoa, 38 kmt by Valesul and several others looking at delaying new smelting capacity. 
 
It will not take long for this to translate into a minimum of 500 kmt calcined petroleum coke (~2 calciners CPC) of lower demand for use globably (~720+615+38=1373 X0.36 kmtAL/kmt CPC=494 kmt CPC). Since refineries are cutting back and taking shutdowns early due to bad margins it is likely to be a wash except for the long supply lag between coker production to stored calcined coke for shipment, so look for both green and calcined coke inventories to grow in 4Q 2008.
 
Regards

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