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RE: Aluminium – Major mkt development in Oct/2010 as prices-demand sink / inventories rise

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Charles Randall

Here is Global overview on Aluminum market developments by reuters that indicate trends for prices-demand to sink and inventories will rise. 
Gives backdrop/reason for recent talk about Alcoa looking to push for lower petcoke prices and Rio Tinto/Alcan promoting some new price indexing towards Iron ore next year/2011. The lag / bad timing metals markets often try push into petcoke markets but seldom work and often create an environment that just increases natural refining shift away from anode quality petcoke production and into more fuel coke. Consolidation & Economic shutdowns are about to shove this into critical mass in the next coker addition cycle.
Alcoa has been dragging around its ~2001 Inert Anode development as strategic club to used against calcined petcoke prices for the last 10 years but has yet to convert any existing plant (its Massena & Pittsburg test lines don’t count as commercial applications) or put it in any new grassroots plant. Hasn’t been bad example of bluffing/bad faith positioning like this since the Houston Crown Refinery used threaten starting up scrap calciner during price negotiations for over 10 years until plant was sold & scrap physically removed!
And others like Rio take advantage of effect on price without any commercial ready backup plan (Alcoa never played well with others and is unlikely do so on this research breakthrough).  Meanwhile global refining industry has now lost more than 18 coker’s that used produce green anode coke as part of calcining base supply. China and the MidEast are new areas where big losses supply will occur due either domestic smelting capacity increases or new world scale coking refineries become fuel petcoke…..or both.
Continuing to pursue a confrontational philosophy with your major raw materials supplier instead of integrating into that market is plan for disaster (Rio & BHP above all others should know this) that is becoming irreversable. The really sad thing is they went thru the EXACT same process/philosophy with Aluminum pitch producers who used to sell coal pitch as byproduct for $90/ton until they stopped making it due environmental push and the industry eventually had pay over $400-600/ton for stand alone plants to make it as on-purpose product (now includes some Petroleum Pitch producers like MAP).
Stupid is continuing to do the same thing that leads to bad outcome but expecting different outcome….

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