MI ANALYSIS: Non-China alumina production falls in Q1 2007

Global production of metallurgical-grade alumina—with the important exception of China—fell by 2.7% in the first quarter of this year relative to the previous quarter (Q4 06), according to the latest figures from the International Aluminium Institute (IAI).

At 13.287 million tonnes production was up by 1.9% year-on-year but that growth rate was well off the pace of the 4.2% registered over calendar 2006.

The two big changes by geographical category in Q1 relative to the preceding quarter came in Africa and North America.
African production was 102,000t in Q1 2007, down by 16.4% from production of 122,000t in Q4 2006 and by 19.7% from 127,000t in the year-earlier period (Q1 06).

There is only one African alumina refinery—the 700,000tpy Friguia plant in Guinea, which is operated by UC Rusal. As such, the drop in quarterly production gives us some insight into the impact of the general strikes and political strife that hit the country in the first quarter of this year.

First a prolonged general strike in February and then a period of martial law affected bauxite and alumina production and brought the country to a virtual standstill. The situation was only resolved late February, when embattled president Lansana Conte named an independent prime minister to assuage calls for him to step down.

Production of metallurgical-grade alumina in North American was 1.264 million tonnes in Q1 2007, down by 10.6% from 1.414 million tonnes in Q4 and by 14.4% from 1.476 million tonnes in Q1 2006.

The main factor behind lower production in the region was a voluntary production cut taken by Alcoa at its Point Comfort plant in Texas around November of last year.

The company confirmed in January that one of six digesters at the plant had been taken down, reducing production to around 85% of the refinery's 2.3 million tpy capacity. Point Comfort is Alcoa's "flex capacity" in terms of its response to market conditions and Alcoa said at the time it intended to keep the cutback in place at least through the first quarter of this year and quite possibly through all of 2007.