MI ANALYSIS: Western World aluminium production gently accelerating

Western World aluminium production is gently accelerating, according to the latest figures released by the International Aluminium Institute (IAI).

Daily average production in February was 66,800t, compared with January's 66,400t and February 2006's 65,100t.

Cumulative production in the IAI region (excluding China, see below) was 3,927,000t, representing year-on-year growth of 2.4%. That compares with cumulative growth of just 1.7% over calendar 2006.

Recovering production in North America is one of the drivers of the current up trend. North American production averaged 15,000t per day in February, its highest level since December 2005, when Alcoa mothballed the 195,000tpy Eastalco smelter in Maryland.

Two re-activations are currently taking place. Ormet Corp is restarting the 168,000tpy Hannibal smelter in Ohio, a process that is around 50% complete, according to the most recent reports. Alcoa is also very gradually bringing back on stream around 90,000tpy of idled capacity at its Intalco smelter in Washington.

Somewhere lurking in the wings is Glencore's Columbia Falls smelter, which is supposed to be restarting an idled 35,000tpy potline some time soon.

While US production is being reactivated, that in the Asian region is powering ahead. It averaged 10,110t per day in February--a fresh record—while cumulative production of 596,000t over Jan-Feb represented year-on-year growth of 8.8%--the fastest of any of the IAI's categories.

The region's production includes both Persian Gulf smelters, which are benefiting still from expansions last year, and India, which has seen fast production growth for some time.

The laggard is Europe, which recorded zero production growth over Jan-Feb. Here, the expansion of Century Aluminum's Nordural subsidiary in Iceland (on stream end-2006) is obviously only mitigating lower production from closures such as Hydro's 70,000tpy Stade smelter and the 133,000tpy Hamburg smelter both in Germany. The latter is expected to re-open soon under new owner Trimet, while the biggest addition to regional capacity will be Alcoa's 320,000tpy Fjardaal smelter, due to start being fired up in the second quarter.