Trimet Aluminium – Germany’s largest aluminium producer and one of the leading players in Europe – anticipates strong aluminium demand in the coming year while warning that any forecasts are complicated by the impact of U.S. tariffs on the global aluminium industry, reported Reuters on October 8th citing the company’s executive board member Thomas Reuther.
In an interview at the LME Week, Reuther opined:
“I expect global demand for aluminium to increase in 2019. But the customs duties first imposed by the U.S. are having an impact on trade flows, so demand in regional markets is more difficult to forecast.”
The U.S. imposed a 10 per cent tariff on aluminium imports from most countries, including EU states. Moreover, the U.S. imposed sanctions on Russia’s Rusal – the world’s second largest primary aluminium producer – affecting traditional supply chains around the world and particularly in Europe. Reuther pointed out that Rusal was an important aluminium oxide supplier for Trimet’s aluminium smelters.
Commenting on the Rusal sanctions, Reuther explained:
“It is very important for the production of aluminium in Europe and worldwide that a positive and dependable agreement is reached about the U.S. sanctions on Rusal. The current situation with temporary solutions brings uncertainty into an already volatile market.”
Reuther also expressed concern about the high aluminium prices, saying that full production next year will depend on the normalisation of “the relationship between raw materials prices and aluminium prices”.
Aluminium prices have been volatile due to increasing uncertainty in the market. While Norsk Hydro called off the complete closure of Alunorte alumina refinery in Brazil and workers at Alcoa’s Western operations agreed on September 28th to end a strike that had lasted over a month and half, the aluminium market is still expecting the resolution of the Rusal case.