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BHP South Africa aluminum plant strike yet to impact Japanese buyers reports that the strike at BHP Billiton’s(NYSE:BHP) South African Smelter, has yet to impact their largest buyers, Japan.

The story is quoted as saying:

Shipping schedule changes at the end of the year are typical, and there is little concern over possible shipping delays, even if the strike at the smelter stretched to next week, traders added.

 To access the full story, click here.

China’s Chinalco, Chalco formalise Africa JV with Rio Tinto

On Thursday, the state-run parent of Aluminum Corp of China Ltd. (2600.HK) formalised a joint venture with Rio Tinto (RIO.AX) to develop iron ore in Africa, bringing the listed Chalco into the project as it moves to diversify beyond its core aluminum business.

The press release is quoted as saying:

Chalco’s (601600.SS) parent, known as Chinalco, had signed a $2.9 billion non-binding pact with Rio Tinto in March to develop the project. Chinalco holds a stake of around 9 percent in Rio.

Click here to access the entire press release

Investing in Aluminum: What Investors Need to Know

Aluminum is one of the most abundant metals on Earth, and is known for being malleable, lightweight, conductive and very resistant to corrosion. It is used in everyday items such as pop cans and cookware, as well as in automobiles and aircraft. In fact, its role in the transportation industry has continued to grow as manufacturers make the switch from steel to aluminum.

For those looking at investing in aluminum, there are a few different ways to go about it: through aluminum exchange-traded fund (ETFs), aluminum futures and, last but not least, aluminum stocks. Here the Investing News Network explains what market participants need to know when investing in aluminum.

Aluminum ETFs

Investing in aluminum ETFs is a good route for those looking for exposure to the metal without a futures account and without having to corner the market on stocks or physical assets. For those not familiar with ETFs, they are essentially marketable securities that track either an index, a commodity, a bond or a basket of assets like an index fund. ETFs trade on stock exchanges and offer a couple of advantages, such as tax benefits.

However, one downside to investing in aluminum ETFs is that there are just two options to choose from: the iPath Bloomberg Aluminum Subindex Total Return SM IndexETN (ARCA:JJU) and the Pure Beta Aluminum ETN (ARCA:FOIL). There was a third option called the Global X Aluminum ETF, but it closed down in 2013 due to lack of investor interest.

Aluminum futures

Investing in aluminum futures is another option available. A futures contract is basically a contractual agreement to buy or sell a specific quantity of a commodity at a predetermined price at a specified date in the future. Contracts are held at a recognized stock exchanges, with those exchanges mediating and facilitating the involved parties. Because everything is predetermined, investors are protected against adverse price changes — similar to an insurance policy.

CME Group (NASDAQ:CME), an American futures company and one of the largest options and future exchanges, offers a unique option: a physical aluminum futures contract. The company states on its website that this contract “offers the ability to deliver or take delivery of Primary Aluminum T-Bars, Sows, and Ingots in a timely, transparent, and efficient fashion at CME Group registered and regulated facilities.”

The London Metal Exchange also acts as a platform for individuals to invest in both futures and options, including an aluminum futures contract, with specifications put in place to regulate activity among members.

Aluminum stocks

Finally, investors can choose to put their money directly into aluminum stocks — companies that are involved in the extraction or production of the metal. There are a number of companies investors may be interested in, especially those that have been able to survive amid recent low prices — many of those are larger producers that have lower costs.

Some of the large companies in the space include Alcoa (NYSE:AA), Century Aluminum (NASDAQ:CENX), Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) and Norsk Hydro (OTCMKTS:NHYDY). Other aluminum companies worth mentioning are Alumina (ASX:AWC) and South32 (ASX:S32), a spin off of mining giant BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT).

Aluminum market

Looking at overall aluminum market trends, BMO Capital Markets and Metal Miner have both recently lowered their price forecasts for the year, despite a brief price hike that took place in May.

However, Norsk Hydro, a global aluminum production company, told Platts this month that global primary aluminum consumption increased by 5 percent year-over-year in Q2 2015, reaching 14.8 million metric tons (MT). All in all, the company sees global primary demand for the metal rising by 2 to 3 percent during 2015, and is confident in its future.

Similarly, Alcoa Chairman and CEO Klaus Kleinfeld is positive on his company’s prospects. “In the upstream, our Alumina business delivered its best first half since 2007 and our lower cost metals business showed resilience in the face of strong market headwinds,” he said in a release this month. “Productivity and cash generation were excellent.”

For patient investors, then, aluminum may be a good market to consider getting into. Though the metal’s prospects are currently a little lackluster, industry heavyweights seem confident in its long-term future.


Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article. 

Related reading: 

Aluminum Price Outlook: BMO Says ‘Lower for Longer’

The Aluminum Recycling Revolution

New Bauxite Mines Set to Benefit from Aluminum Deficit?

New Bauxite Mines Set to Benefit from Aluminum Deficit?

Work has begun on Tasmania’s first bauxite mine in 30 years, bringing jobs to an industry looking to take advantage of growing interest in the aluminum market.

Bauxite, the third most abundant metal in the Earth’s crust, is the first stop in producing aluminum. Bauxite is refined to alumina, which through a smelting process is then turned into aluminum. Bauxite is usually strip mined, as it’s normally found near the surface of the terrain. Australia produces 23 percent of the world’s bauxite.

Australian Bauxite (ASX:ABX) has begun construction on its Bald Hill project, which will create about 45 direct jobs and a further 135 indirect jobs in the local economy. Australian Bauxite conducted exploration on the property in 2010 and has since moved to have those initial exploration licences turned into a full-fledged project. The company expects 1.6 million tonnes of bauxite to be mined from the three pits that make up the property.

“The opening of the Bald Hill mine will not only generate welcome economic activity but showcases the mineral diversity and potential of Tasmania,” Paul Harris, the country’s minister for resources, is quoted as saying by Australian Mining.

The news coincides with the announcement of an inferred mineral resource estimate for the Toubal bauxite deposit in Guinea, West Africa. Anglo-African Minerals (ETR:AMQ), which owns the property through subsidiaries Tougue Bauxite and Alumina, said the estimate came in at 722 million tonnes averaging 42.6 percent total alumina and 3.7 percent total silica.

“[W]e are further encouraged by the fact that the very limited confirmatory exploration is required in order to upgrade the Mineral Resource into higher confidence categories, potentially in the Measured and Indicated categories,” said James Lumley, CEO of Anglo-African, in a statement. “This Project represents a large resource base in a location that is likely to benefit strongly from third-party infrastructure developments in the country.”

An estimated deficit in aluminum supplies could trigger a rush in demand which would in turn increase the price of bauxite. Due to China’s need for aluminum — it leads the world in demand and consumption — combined with falling production in North and South America, a hole in supply is expected. Wang Chunhui, an analyst with Shanghai Metals Market, has predicted a price range of $1,850 to $2,150 per tonne throughout the year.


Securities Disclosure: I, Nick Wells, hold no direct investment in any of the companies mentioned in this article.

Related reading: 

Aluminum Outlook 2015: Hope in Deficit

Eskom Interrupted Power to BHP Billiton Aluminum Smelter on Low Supplies

Bloomberg reported that power to BHP Billiton’s (NYSE:BHP) South Africa smelters was cut due to low power supplies.

The market news is quoted as saying:

Eskom also invoked power-reduction agreements with large customers it can’t name “more frequently, almost daily,” Hilary Joffe, a spokeswoman for Johannesburg-based Eskom said by phone today.

To read the full market news, click here.

Rusal Sees Steady 2011 Aluminium Output Growth

Reuters Africa reports that Rusal Plc (HKG:0486) sees steady output growth in 2011, driven by strong demand from China and a rebound in North America.

The market news is quoted as saying:

Its shares closed at a record high on rising output and hopes that the aluminium giant is inching toward a sale of its stake in top world nickel miner Norilsk Nickel (GMKN.MM: Quote) which could effectively erase its debt of more than $11 billion.

Click here to access the entire news

Strong aluminum demand boosts Novelis results

Reuters Africa reports that Novelis Inc posted a net quarterly loss on Tuesday, but said growing global demand boosted adjusted earnings.

The market news is quoted as saying:

The net loss was $46 million for the third fiscal quarter of 2011, compared with net income of $68 million for the same period in fiscal 2010, said the Atlanta-based company, which is a subsidiary of India’s Hindalco Industries Ltd

Click here to access the entire news

BHP Workers Strike at Its Largest Aluminum Smelter reports that workers at BHP Billiton’s (NYSE:BHP) South African Aluminum smelter have gone on strike, demanding higher wages.

The story is quoted as saying:

The National Union of Metalworkers of South Africa, which is demanding a 12 percent wage increase, said others will join the 200 employees who began the walkout at the Hillside and Bayside smelters owned by world’s largest mining company.

To access the full story, click here.

Aluminum Demand to Rise 5.3% a Year, Output Increase Needed, Rio Projects reports today that in anticipation of the increased need for aluminum ( 5.3%/ per year for the next decade), aluminum producers will need to increase global output by two-thirds, according to executives at Rio Tinto’s (NYSE:RIO) Alcan division.

The story is quoted as saying:

Unless new smelters are built by 2020, demand for the metal used in car parts and airplanes will outstrip supply by 27 million metric tons a year, Amir Mirchi, vice president of business development for the Middle East and North Africa at Rio Tinto Alcan, said, citing company forecasts. Global aluminum production and consumption this year will probably rise to about 40 million tons, he said.

For the full story, click here.

Guinea threatens RUSAL workers as strike continues

On Tuesday, workers at RUSAL’s (0486.HK) Friguia alumina refinery in Guinea blocked production for the sixth day in a row after initial negotiation efforts failed and the government threatened to send in security forces.

The press release is quoted as saying:

The plant, the largest industrial project in the fractious West African nation, has a capacity to produce around 640,000 tonnes of alumina per year, which the Russian firm then ships around the world to be refined further into aluminum.

Click here to access the entire press release

Click here to access UC RUSAL Corporate Site

Anglo Aluminum Acquires Mamou-Dalaba Bauxite Project

Anglo Aluminum Corp. (TSX VENTURE:ALU) reported the acquisition of the Mamou-Dalaba bauxite property in Guinea, West Africa.

The press release is quoted as saying:

Anglo Aluminum retained Coffey Mining (Coffey) of Perth, Australia to complete a preliminary assessment of the project. Based on the high-prospectivity of these plateaus, Anglo Aluminum is working with Coffey to develop a program to quickly confirm these bauxite targets through drill testing. Anglo Aluminum acquired the Mamou-Dalaba project through an agreement to purchase 100% of the issued share capital of Societe Guineenne de Fer et de Bauxite (SGFB), a local Guinean company that holds the 4 Mamou-Dalaba bauxite permits.

Click here to access the entire press release

Click here to access Anglo Aluminum  Corporate Site