LME Roundup – LME Introduces New Programs, While Premiums Sag

August 4 –Aluminium prices not curbing Chinese output,” The Australian Business

August 19 –Is another showdown looming on aluminium spreads?” Gulf Times

August 20 –LME plans to introduce ‘market-making’ programs,” Platts

The London Metal Exchange said Thursday it plans to introduce market-making programs to support the launch of new products and enhance liquidity on existing contracts. These are the first programs of their kind to be introduced by the LME in its 138-year history, the exchange said in a statement.

“The programs will provide market makers for the LME’s forthcoming aluminium premium contract and two new ferrous contracts — steel scrap and steel rebar — set for launch on November 23, 2015,” it said. “The LME is also today announcing a similar market-making program, coming into effect on October 1 2015, to boost existing third Wednesday contract liquidity on LMEselect as part of its Liquidity Roadmap initiative.”

August 20 –Aluminum market ‘deathly quiet’,” American Metal Market

Read More…

Automotive Drives Aluminum Innovation — Our October 2015 issue Now Available


The October 2015 issue of Light Metal Age has launched! The digital edition has been released to subscribers and the print edition will be shipped next week.

On the cover: The multitude of useful, versatile, and attractive aluminum applications/markets present in our every day lives are pictured in this scene of Detroit, MI. From top left, clockwise: planes/aerospace, skyscrapers/buildings and construction, space launch vehicles, bicycles, smart watches, automobiles, cans, cameras, boats/marine, cellular phones, and trains. Aluminum is truly an extraordinary metal! (Artist: Thomas Fielding)

Feature Articles include:

  • Aluminum ABS for Lightweighting: Recycling Critical for Future Growth, by Geoff Scamans, Innoval Technology, and Andrew Hall, Alken
  • Crystal Finishing Broadens Capabilities – Installs Most Productive Vertical Paint Line of its Size in U.S.
  • Defects Affecting Extruded Surface – Orange Peel, by Jerome Fourmann, Rio Tinto, Aluminum Product Group
  • Automotive Lightweighting Promises Great Changes to the Material and Manufacturing Landscape, by Lynn Brown, Consulting Collaborative
  • Rio Tinto Seizing Automotive Opportunity: Petits Lingots Saguenay – New Small Ingot Foundry
  • Expanded FSW Services for North America: HFW Consolidates Capabilities
  • The Case for Aluminum in Body-in-White Design, by Dr. Alex Graf, Constellium
  • Advancing U.S. Leadership in Lightweight Technology: Interview with Lawrence E. Brown, LIFT Technology, by Joseph C. Benedyk, Light Metal Age
  • New Generation of High Strength Aluminum Casting Alloys, by V.Kh. Mann, A.N. Alabin, A.Yu. Krokhin, and A.V. Frolov, UC Rusal, and N.A. Belov, National Research and Technological University “MISIS”
  • 9th Aluminium Two Thousand Congress: Focus on Extrusion Processing, by Joseph C. Benedyk, Light Metal Age
  • Aluminium Two Thousand: Nickel-Free Cold Sealing with High Performance for Anodized Aluminum, by Walter Dalla Barba and Fabio Vincenzi, Italtecno Srl
  • Aluminium Two Thousand: Analyzing the Effect of Automated Die Polishing on Extruded Aluminum Profile Quality, by John Stackhouse, Micro Technica Technologies, and Chandika Wickramatillake, Alumex
  • ICEB 2015 – International Conference on Extrusion and Benchmark, by L. Donati and L. Tomesani, University of Bologna, and A. Selvaggio, M. Haase, and A.E. Tekkaya, TU Dortmund University
  • The Importance of Attending Aluminum Association Casthouse Safety Workshops, by Alex W. Lowery, Wise Chem LLC
  • TMS 2015 Annual Meeting and Exhibition – Exhibitor Photos

Other editorial includes:

  • Technology Spotlight: Improved Method for Removing Sodium and Calcium from Molten Aluminum
  • Book Review: 2014 Aluminum Statistical Review, reviewed by Ryan Olsen, Aluminum Association
  • ET Springs Forth in May 2016, by Craig Werner, ET Seminar Committee Chairman
  • ALUMINUM USA Exhibitors – Equipment Showcase

Light Metal Age will be distributing the October 2015 issue at the ALUMINUM USA trade show in Detroit, MI, on November 11-12. Visit us at booth #1407 to receive your copy. Register using the code ALU46 to get a free pass into the show.

If you would like to receive a copy of the October 2015 issue, as well as future issues of Light Metal Age, subscribe online today!

The Aluminum Association Responds to U.S.-China Joint Presidential Statement on Climate Change

The Aluminum Association commended the Joint Presidential Statement by the U.S. and China, which lays out concrete and achievable goals for addressing climate change, and in a time frame that emphasizes the immediacy of these challenges.

The U.S. aluminum industry has long been part of the solution to address climate change in many respects.  Automakers are using lightweight, military-grade aluminum to help achieve far greater fuel economy for their fleets. The construction market relies on aluminum for increasing the energy efficiencies of new buildings.  And the increasing rate of recycling is saving energy consumption in the packaging market.

The U.S.-China Joint Presidential Statement promises to make these kinds of gains enjoyed in the U.S. commonplace in China within a short period of time. If implemented well, China’s new cap and trade system should provide ample incentives for carbon-intensive aluminum smelters in China to be phased out.

“We welcome China’s commitments to a cleaner manufacturing future, and the use of aluminum will be a meaningful solution to the challenges of global climate change,” said Heidi Brock, president and ceo of the Aluminum Association.  “As they work to address climate change, we believe China should commit to setting appropriate standards for aluminum production emissions and coal usage, taking offline production assets that do not meet those standards.”

In 2005, China supplied 13% of the world’s aluminum. Today, spurred by energy subsidies, Chinese producers supply roughly half of this metal.  China’s tax regime also incentivizes the export of this excess, carbon-intensive production which has displaced energy-efficient, sustainably produced North American aluminum.

The Aluminum Association is working to raise the visibility of a variety of issues with the U.S. government related to the global trade of aluminum — calling on relevant authorities to investigate claims of unfair trade practices like the deliberate misclassification of metal to avoid taxes, and urging bilateral discussions between China and the U.S.

On Two Wheels or Three, Modern Designs Echo Classic Lines


BMW Customized with Art Deco Aluminum Body

Fred Bertrand, award winning owner of Krugger Motorcycles, was commissioned by BMW Motorrad France to customize a  BMW K1600 luxury touring bike. The only requirement was to keep the 161-horsepower engine and all of the electronics in place. “Building a bike is easy,” said Bertrand. “But building a bike and keeping all the technology of the K1600 is more difficult.”

The resulting redesigned model, called “NURBS” after the Non-Uniform Rational B-spline, is an art deco masterpiece with hand-formed steel and aluminum bodywork, including swingarms that append both wheels, which were forged from a single piece of aluminum. The bike also includes a hand-built aluminum chassis, which was lengthened to fit the design. It took Bertrand 3,000 hours to produce the bike, which has garnered a Motorcycle of the Year Award.


Photo: Krugger Motorcycles.

Teardrop Trailer Wraps Fine Woodwork with Aluminum Skin

High Camp Trailers produces limited edition camping trailers with classic style and modern interiors. The company’s new trailer incorporates a slick aluminum shell over a finely crafted birch wood interior. The interior has 40 inches high cabin equipped with a queen sized mattres and the galley provides a three-burner cooktop and Coleman stainless steel cooler. Each trailer is built from scratch, which can take six to eight weeks or more.

Dennis Caron, the founder of High Camp Trailers, said, “My customers tend to have a strong design sense and are drawn to the extensive woodwork in the trailer and, of course, the shiny aluminum skin reminiscent of Airstream trailers.”

High Camp teardrop camping trailer.

High Camp teardrop camping trailer.

Cargo Tricycle Conceived as Aluminum-Skinned Rocket

Boxer Cycles drew upon both fictional and real-life aircraft from decades past to design their Boxer Rocket cargo tricycle, taking inspiration from the Hiddenburg as well as the fictional worlds of Jules Verne to create a piece of functional steampunk art. The front “rocket” shell is formed of laser-cut aluminum and includes a hollow nose cone compartment for storing helmets or other items. Furthermore, the Rocket’s ‘aerospace girder’ rear frame was designed to be stronger than tube of the same weight and prevents the flex commonly found in cargo trike frames.

The Boxer Rocket was built as a one-off promotional design, but garnered so much attention (including being voted into  the world’s top 10 most beautiful bikes of 2015) that the creators put it into production.

Boxer Rocket.

Boxer Rocket.

CME Group – First Trades of Aluminum European Premium Futures

CME Group announced that the first Aluminium European Premium Duty-Unpaid futures contracts were traded on September 22, 2015 by Crunch Risk, LLC. A total of 10 futures contracts traded at a price of $72.50 per tonne. “We’re pleased to see early support for our new Aluminium European Premium futures, which are an outgrowth of our existing suite of aluminum risk management tools,” said Young-Jin Chang, CME Group senior director of Metals Products. “Based on the success of our Midwest premium futures, we worked closely with the aluminum industry to develop these contracts that enable our customers to hedge their exposure to European premium volatility.”

“This new contract from CME Group comes at a time when we’ve seen significant demand from our client base in mitigating their premium risk both in the U.S. and in Europe,” said Andre Marshall, president of Crunch Risk, LLC. “We applaud CME Group for being first to market with this new aluminum European premium contract and are pleased to help facilitate its launch by brokering the first trades. Moving forward, we’re optimistic about the potential for continued growth and liquidity in this contract as we continue to see volatile premium prices.”

The group first saw the first North American physically delivered aluminum futures contracts traded on May 6.

Alcoa Transforms – Separates into Two Companies

Alcoa Davenport Works
Photo: Alcoa Davenport Works.

Alcoa is entering upon a multi-year transformation with the plan to separate into two independent, publicly-traded companies — an Upstream company and a Value-Added company. “Inventing and reinventing has defined our company throughout its 126-year history,” said Klaus Kleinfeld, chairman and chief executive officer, Alcoa. “In the last few years, we have successfully transformed Alcoa to create two strong value engines that are now ready to pursue their own distinctive strategic directions.”

The Upstream company will comprise five strong business units that make up Alcoa’s Global Primary Products, including bauxite, alumina, aluminum, casting, and energy. The  Value-Add company will include Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions.

After the separation, the Upstream company, with its strong history in the aluminum and alumina markets, will operate under the Alcoa name. The Value-Add company will be named prior to closing. The transaction is expected to be completed in the second half of 2016.

The Upstream Company

After the separation, the Upstream company will focus on bauxite mining, alumina refining and aluminum production with a footprint that will include 64 facilities worldwide and approximately 17,000 employees. “We have repositioned the upstream business,” said Kleinfeld. “We have an enviable bauxite position and are unrivalled in alumina. We have optimized aluminum, flexed our energy assets, and turned our casthouses into a commercial success story. The upstream business is now built to win throughout the cycle.”

Pouring bath into a pot at Alcoa's Tennessee smelter.

Pouring bath into a pot at Alcoa’s Tennessee smelter.

Global aluminum demand is expected to grow 6.5% in 2015 and double between 2010 and 2020. So far this decade, global demand growth is tracking ahead of this projection. Alcoa believes its Upstream company will be well-positioned to meet this robust demand.

The Upstream company will include the world’s largest bauxite mining portfolio, with 46 million bone dry metric tons of production in 2014. It will also have the world’s largest alumina refining system, with operations well positioned to serve major adjacent growth markets in Asia, the Middle East, and Latin America.

The company will be the world’s fourth largest aluminum producer, having produced 3,125 thousand tonnes of aluminum in 2014. It will also have a value-added casthouse network in close proximity to customers, and a substantial portfolio of energy assets with power production capacity of approximately 1,550 megawatts with operational flexibility to profit from market cyclicality.

Alcoa has also steadily grown its offering of differentiated, value-add aluminum products that are cast into specific shapes to meet the needs of customers. The company has grown total value-add product shipments from its smelters from 57% in 2010 to 65% in 2014, delivering $1.3 billion in total incremental margin. In 2015, value-add products are projected to represent approximately 70% of smelter shipments. The company has also invested in the most advanced, low cost integrated aluminum complex in the world in Saudi Arabia, Ma’aden-Alcoa, with the refinery and smelter now fully operational.

The Value-Add Company

After the separation, the Value-Add company will be a premier provider of high-performance multi-material products and solutions with 157 globally diverse operating locations and approximately 43,000 employees. “Our multi-material value-add business is a leader in attractive growth markets,” said Kleinfeld. “We have intensified innovation, made successful acquisitions, shed businesses without product differentiation, invested in smart organic growth, expanded our multi-materials profile and brought key technologies to market, all while significantly increasing profitability.”

The Value-Add company will be positioned for profitable growth by increasing its share in fast growing end markets and leveraging significant customer synergies across the midstream and downstream portfolios. The company will be a differentiated supplier to the high-growth aerospace industry with positions on every major aircraft and jet engine platform, underpinned by market leadership in jet engine and industrial gas turbine airfoils and aerospace fasteners. Approximately 40% of the company’s pro-forma revenues for the 12 months through June 30, 2015 came from the aerospace market.

Alcoa's recently opened Al-Li plant in in Lafayette, Indiana, where it produces alloys for aerospace parts.

Alcoa’s recently opened Al-Li plant in in Lafayette, Indiana, where it produces alloys for aerospace parts.

The company will also be at the forefront of capturing demand for aluminum intensive vehicles through Alcoa’s recent rolling mill capacity expansions and the commercialization of breakthrough technologies, such as the Micromill. Automotive revenues are expected to increase 2.4 times from 2014 to $1.8 billion in 2018. Additionally, the Value-Add company is expected to be a leader in aluminum commercial truck wheels and will hold the number one market position in North American architectural systems. Future profitable growth will be supported by a full pipeline of innovative products and solutions and the pursuit of investment opportunities that provide a return above the cost of capital.

Management Structure

The Value-Add company and Upstream company will have distinct value profiles with the ability to effectively allocate resources and deploy capital in-line with individual growth priorities and cash-flow profiles. The separation will enable both the Value-Add company and Upstream company to pursue their own independent strategies, pushing the performance envelope within distinct operating environments.

Upon completion of the transaction, Klaus Kleinfeld will lead the Value-Add company as chairman and chief executive officer. He will also serve as chairman of the Upstream company for the critical initial phase, ensuring a smooth and effective transition. Each company will have its own independent board of directors that will include members of the current Alcoa Board. Full management teams and boards for both companies will be named in the months leading up to the launch of the two companies in the second half of 2016.


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