英语新闻铝业的全球困境.doc

Aluminium buckles under supply pressure
By Jack Farchy in London

“I don’t like aluminium.”
That may seem an unlikely statement from the world’s sixth-largest producer of the metal. But Marius Kloppers, chief executive of BHP Billiton, is putting his money where his mouth is. BHP will from now on run its aluminium division for cash, he announced in February.
Mr Kloppers can afford to dislike aluminium; the majority of his profits come from iron ore, oil and coal. But for the rest of the industry, his comments have sparked a debate: after a decade of sub-par profitability, is it still worth investing in aluminium?
Right now, at least, the industry’s report card makes grim reading. Beyond BHP, which reported a pre-tax loss in aluminium in the six months to December 2011, Rusal, the world’s largest producer, saw a 72 per cent drop in profits from its operating activities in the final quarter of last year; New York-listed Alcoa,which reports second-quarter results on Tuesday, swung to its first quarterly loss since 2009; and Rio Tinto’s two top executives passed up their bonuses after the company took an $8.8bn writedown on its aluminium assets.
“Financially speaking, aluminium has been challenging over the past decade,” Svein Richard Brandtzæg, chief executive of Norsk Hydro, the world’s fifth-largest producer, wrote in his annual letter to shareholders.
Daniel Brebner, metals analyst at Deutsche Bank, estimates that the operating profit margin for a marginal aluminium producer has been 14 per cent over the past decade, compared with 43 per cent for copper.
“While copper has been exceptionally profitable, aluminium has had an unremarkable performance during one of the greatest commodity boom periods in history in terms of demand,” he says. “This is a condemnation of the state of the industry that it can’t generate super-normal returns in an environment of super-normal demand.”
If Mr Kloppers is correct, the future is bleaker still for producers of the metal used in the manufacture of everything from drinks cans to cars and aircraft.
The argument underpinning his pessimism is simple: years of overcapacity have kept prices subdued and led to a huge build-up of inventories – now estimated at more than 12m tonnes, or enough to build 180,000 Boeing 747s. And with the price of energy, which accounts for as much as half of aluminium production costs, rising rapidly, industry-wide profitability is flat at best.
“Our view is that aluminium has had a structural profitability downturn, as opposed to a cyclical profitability downturn,” Mr Kloppers told analysts recently.
However, not everyone agrees.
The most popular response among rival aluminium executives is to point to China which, as well as being the world’s largest aluminium consumer, is also the top producer. With some of the highest cost smelters in the world, many executives and analysts argue that it is only a matter of time before China’s aluminium industry is no longer able to meet domestic demand, turning the country into a large importer and revolutionising the aluminium market.
“If you are the average Chinese producer you should probably quit this business right now or a few months ago,” says Oleg Mukhamedshin, head of corporate development at Rusal, predicting that many Chinese aluminium smelters will be forced to shut down in the next few months, pushing up global prices.
But China has a record of confounding forecasts. Despite low prices and rising costs, the rate of Chinese aluminium production jumped hit a record 53,000 tonnes a day in February, according to Barclays Capital.
Moreover, the Chinese aluminium industry is embarking on an enormous programme of expansion in the coal-rich Xinjiang province in the country’s far west. Industry executives believe that as much as 10m tonnes of annual production capacity – enough to meet nearly 60 per cent of China’s current demand – will be built in western China in the next three years.
That could mean the surge in Chinese aluminium imports that western producers are hoping for may not materialise any time soon.
“We realise we can’t wait around for China,” concedes Klaus Kleinfeld, chief executive of Alcoa. “The west has to figure its structure out for itself, and that’s exactly what we’re doing.”
He adds that the aluminium industry in China is “struggling”.
“They are pushing out capacity to the west to take advantage of low cost coal, but cheap coal isn’t infinite and the new plants will be challenged by lack of infrastructure and lack of water in the region.”
Alcoa has announced it will cut its global production capacity by 12 per cent this year; together, non-Chinese producers are set to cut production by about 1m tonnes, or 4 per cent, according to Mr Mukhamedshin of Rusal.
But some in the industry are sceptical of the announced production shutdowns. Despite the large inventory overhang, traders and banks are keeping prices elevated by buying aluminium to make a profit from storing it and benchmark prices have risen nearly 10 per cent from their December lows.
“The industry struggles with self discipline,” observes Julian Kettle, head of metals and mining research at Wood Mackenzie.
Indeed, at the end of March, Alcoa said it would postpone the closure of its smelter in Sardinia as it seeks possible buyers.
It would not be the first time that supposedly closed smelters had risen from the dead, keeping the market oversupplied and prices depressed. The term “Lazarus smelters” was coined in the 1980s when several previously mothballed plants were reopened. The aluminium industry will hope it is not about to make a comeback.