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Special: Aluminum smelting industry Innovative energy and fluoride recovery Improvements for the operation of anode baking furnaces Modeling cathode cooling after power shutdown ECL Improvement of thickness tolerances for a two-stand aluminum cold rolling mill Volume 88 January / February 2012 International Journal for Industry, Research and Application Aluminum market outlook 1/2 Compact type remelt State-of-the-art Scrap Recycling Leading technology in the aluminum casthouse There are many bene fi ts in one-stop-shopping of industrial goods. At Hertwich Engineering we provide customer oriented service throughout the project duration and service life of equipment. We design and build plants to meet both, our own stringent standards and individual customers specifications. Based on many years of experience, we cover the full range of equipment in a modern aluminum casthouse. Compact type remelt plant Q Q Q Q Major bene fi ts Hertwich Engineering is well-known for leading edge technology. Our valued customers deserve to get the best value for money. Commitment to innovation, solid engineering and own R&D are instrumental for staying ahead with continuous improvements and new products. QQQ Most ef fi cient installation for recycling of in-house and purchased scrap One single fully automated process, starting with charging of scrap and fi nishing with homogenized billets, ready for extruding or forging Lowest labor costs, one to two operators per shift only Special design for remelting scrap contaminated with paint, plastic or oil, also with chip melting system available Optionally equipped with vertical DC caster Capacity 2,000 to 30,000 tons / year More than 25 plants installed HERTWICH ENGINEERING GMBH Weinbergerstrasse 6 5280 Braunau, Austria Phone: +43 (0) 7722 806- 0 Fax: +43 (0) 7722 806-122 E-mail: [email protected] Internet: www.hertwich.com EDITORIAL Volker Karow Editor-in-Chief Editor in Chief Aluminum demand remains high Demand for aluminum stays high ALUMINUM · 1-2 / 2012 Nach Given the very strong growth of 5.1 percent in 2010, global economic output is likely to have only increased by around 3.8 percent in 2011. For 2012, all economic analysts expect a further weakening of world production. Opinions only differ on the extent of the skid marks. However, following the principle of hope, global production is forecast to pick up again in 2013. This hope is fed by the fact that Europe will fall into an only mild recession, the USA will grow moderately and the momentum in the emerging countries will continue. Nevertheless, the current year holds numerous old and new imponderables and challenges. The key words are: the sovereign debt crisis in Europe and the USA, the US administration's ability to act in the election year, the oil embargo against Iran and its consequences. Nevertheless, the mood in the industry is not entirely negative, not even in the aluminum industry. Alcoa boss Klaus Kleinfeld was optimistic about aluminum demand when he presented the latest quarterly figures. He expects a growth rate of seven percent for the current year. The increase would be lower than in 2011 and 2010 (10% and 13% respectively), but it would still be remarkably high. Kleinfeld is not alone in his assessment; Other CEOs also assume that the short-term market demand for aluminum will increase at an above-average rate. The industry sees medium and long-term development in rosy colors anyway. This current demand is primarily driven by the transport sector, especially from aircraft and automobile construction, followed by the target markets of construction and packaging. According to Kleinfeld, this and the cuts in aluminum production that have now started will result in a global supply gap of around 600,000 tons of primary aluminum this year. That should have a stabilizing effect on the aluminum price and perhaps end the downward trend that began in April 2011. But the analysts' expectations about the further development of the aluminum price diverge widely (see Outlook on the aluminum market, pages 19-24). As in previous years, the January / February edition of ALUMINUM is traditionally dedicated to the primary aluminum industry and its suppliers. Once again, a number of highly interesting, technically oriented contributions could be collected, which show that there is no technical standstill in the industry. After the very robust growth of 5.1 percent in 2010 the world's economic performance is likely to have risen farther by only about 3.8 percent during 2011, the year just ended. For 2012 all economic analysts anticipate a continuing downturn of world production: opinions differ only about how severe this will be. Driven by a spirit of hope, however, a recovery of global production is forecast for the following year, 2013. That hope is nourished by the expectation that the recession in Europe is only mild, moderate growth is taking place in the United States, and the dynamic is persisting in developing countries. Yet, the current year harbors many old and new uncertainties and challenges. The key words are: national debt crises in Europe and the USA, the US Administration’s freedom of action in an election year, the oil embargo against Iran and it consequences. Despite all that the mood in the industry is not all gloomy and the same is true in the aluminum industry. When presenting the latest quarterly figures, Alcoa boss Klaus Kleinfeld waxed optimistic about the demand for aluminum. For this year he anticipates growth of seven percent and although this would indeed be lower than in 2011 and 2010 (with 10% and 13%, respectively), it is still remarkably high. Mr Kleinfeld is not alone in his estimate: the CEOs of other aluminum groups too are expecting the short-term market demand for aluminum to increase at an above-average rate. As things stand, the sector views the medium- and long-term development in a rosy light. The current demand level is driven above all by the transport sector, especially aircraft and automotive engineering, followed by the target markets of building and packaging. This, together with the aluminum production cutbacks occurring meanwhile, will lead in Kleinfeld’s view to a global supply shortfall of around 600,000 tonnes of primary aluminum during the course of this year. That is likely to have a stabilizing effect on the aluminum price and could well be able to bring the decline since April 2011 to an end. Yet, the expectations of analysts about the further development of aluminum prices are widely different (see Aluminum market outlook, pages 19-24). As in previous years, the January / February issue of ALUMINUM is traditionally devoted to the aluminum smelting industry and its suppliers. This time too a number of highly interesting and technically oriented contributions have been assembled, which demonstrate that there is no technical standstill in our industry. 3 CONTENT EDITORIAL A l umi niu mn inquiry stay s high • De ma nd fo ralu mi nium stay s high ... 3 NEWS • NEWSIN LETTER En e rgy intens ive In du st ri e st ab ilisie rt St ro mn etze .............................. 6 A le ri s builds foundries for Al -Li -Le gi e n g e s ........................................ 6 A lcoacuts gl obalcapacityby 12 pe rc ent .......................................... 7 A le ri sbuil ds ca sting fa cility fo ralu mi niu ml ithiumallo ys .................... 7 M e ta ll gi e ß e re i Sch eef - P ro du ctionse rwe ite ru ngin Bra n de nburg ......... 8 M agnaac qu i re s BDW ca st in gs operations ................................... ...... 9 Ko be St eelto fo rm alu mi nium jo int ve ntu re in Ch ina ......................... 9 SM S: Incoming order 2 011 over the previous year sni ve au ............................. 10 11. Formed e ch nical Ko llo qu ium Da rmst a dt, 6th / 7th March 2012 .......... 10 TC Pri s ma - ap owe rfu l ma te ri alp re cipitation mod de llings of tware ....... 11 26 6 th Mi ddl e E a st Al u mi nium 2 012 Co n fe re nce ............... ..................... 11 ECONOMY • ECONOMICS A l umi niu mpre ise ................... .................................................. .... 12 production data de r de uts ch en Al u mi niu mi n du st ri e ......................... 14 A ra ba l 2 011 fo cusingon O ma n's alu mi niumin du st ry ......................... 16 A l umi nium mark toutlook - a ye arofunce rt aintyand ch allege ....... 19 ALUMINUMME LT INGINDUSTRY 32 TM S 2 012 - wi de ra n ge ofte ch nicals ymp osia .................. ............... 24 Duba lp ro p ri eta ry te ch nolo gy licensedto E ma l P hase II ................ ..... 26 S h ap edcatho de fo rthe mi ni mi sationofthe Ha ll -Hé ro ultp ro cessspeci fi cene rgy consu mp tion ................... .......... 28 Precisionpot fe e di ng fo rbetteren vi ro n me ntalp ro tection ................. 32 Tre nds in mo de rn re cti fi e rs - ene rgy e ffi ciencyand ava ila bility ........... 34 I nn ova ti ve ene rgy and fl uo ri de re c ove ry ........ .................................. 39 ECL - re n own ede qu ip me ntsuppliertothep ri ma ry alu mi niumin you st ry .............................................. ... 44 4 I mp rove me nts fo rth eope ra tionofano de baking fu rn aces ................. 46 Te st ingcellcont ro lleral go ri th ms usinga dyn a mi ccellsi mulator ......... 50 The aluminum branch meeting of Giesel Verlag: www.alu-web.de 4 Te st ingofca rb on ma te ri als fo r re sea rch andin du st ri alpu rposes ......... 55 ALUMINUM · 1 -2/2012 CONTENTS Anode handling and cleaning systems for modern aluminum smelters ...... 59 S melt er logi st ics up g ra de. . . . . . . . . . . . . . . . . . . . . ........................................ 61 A llian ces intheal um ini um ind ust ry. . . . . . . . ........................................ 63 Mode lli ng ca thodecoolingafterp owe rs hu t down ............................ 65 A umu nd cool ingcon ve yo rforhotbathmate ri al .......... ..................... 68 GAPE ng i neer ing - anewglobals up plier of alumi ni umca st ingte ch nologies. . . . . . . . . ........................................ 71 TE CH NO LO GIE • TE CH NO LO GY Improvement of thickened tole rs on a two-way sparse alum ni um - Kal t wa lz w e rk • I mp rove mentofthi ck nesstole ra ncesf or at st andal um ini um cold ro lling mi ll ..................................... 73 M i croS t re am - S t rö mun gss ch le ife n for p re cis e E n d processing MicroS t re am fl ow grindingforhigh - p re cision fi nish mach ining ........... 78 APPLICATION • APPLIC AT IOND er neu e M erc edes - B enz SL relies on A l um inium T he new M erc edes - B enz SL - al mo st enti re ly ma de ofalu mi nium ...... .80 This issue contains an enclosure from GDA Gesamtverband der Aluminiumindustrie eV to which we draw your kind attention. C O M PA N Y N E W S W O R L D W I D E Advertisers of this issue A l u m i ni u m sme l t i n g. . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................ 82 B a u x i t e a n d a l umi n a. . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................ 83 R ecycl i n g a n d s e c o n d ar y s m e l t i n g. . . . . . . . . . ........................................ 84 Al u m i n i u m semi s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................ 84 List of advertisers ABB Switzerland 47 Buss AG, Switzerland 49 Buss ChemTech AG, Switzerland 35 Coiltec Maschinenvertriebs GmbH 9 CRU Events, UK 21 O nthem ove ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................ 85 Drache Umwelttechnik GmbH 27 Dubai Aluminum Co. Ltd , UAE 15 Suppl iers. . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................ 86 ECL, France 23 Edimet Spa, Italy 23 FLSmidth Hamburg GmbH 29 Glama Maschinenbau GmbH 25 RESEARCH D asaec (alu mi ni um engineeringcenter) in Aachen - the world's largest university center for aluminum research and teaching, part I ....... 87 DOCUMEN TAT ION Hertwich Engineering GmbH, Austria 41 Inotherm Industrieofenund Wärmetechnik GmbH 65 Messe Düsseldorf GmbH 17 Micro-Epsilon Messtechnik GmbH & Co. KG 75 R&D Carbon Ltd, Switzerland Patents. . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................ 89 I m pre ssu m • I mp rint . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...................................... 105 Prev u • P re vi e w. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...................................... 106 B E Z U G S Q U E L L E N V E R Z E I C H N I S • S U P P L I E R S D I R E C T O R Y ..... 92 ALUMINUM · 1-2 / 2012 2 Innovatherm Prof. Dr. Leisenberg GmbH & Co. KG Reed Exhibition China 53 107 Rösler Surface GmbH 11 SGL Carbon GmbH 31 SMS Siemag Aktiengesellschaft 108 Storvik AS, Norway 45 Thermo-Calc Software, Sweden 33 Wagstaff Inc., USA 13 5 NEWS Energy-intensive industry stabilizes power grids The energy-intensive industries have a burden. They point out that they only contribute significantly to network stability with allegations of partial exemption from network 20 instead of several hundred companies and have even subjected cost-reducing fees to a “fact check”, the exemption ceases and the additional effect on network use , from which everyone benefits from incorrect or incomplete information costs for the end user at 0.1 cents per electricity user. The big kilowatt hour would be. The energy-intensive pantographs adjust the grids so irregularly in the reporting. In the branch statement, the industries will only play a subordinate benefit like private households (heavy use, claim rejected, during the day, little at night), the adoption of the energy would be the need for balancing energy gy package is "secretly" for even utilization a new regulation the electricity network of the networks is significantly higher, so the fee ordinance accommodated WVM. Accordingly would have been. A partial exemption also the network costs for all German energy-intensive companies are higher. of the network charges, so the Err. Against this background, is by no means new. With ne there is no question of an “unjustified bonus” from the energy-intensive amendment of the power line company, according to the expansion law in 2009, companies must work with one of the industry associations. The large electricity purchases of more than 7,000 consumers have had a balancing effect because of the number of hours per year since 2011 that they have exerted on individual network charges for the electricity network, with the fact that at least 20 percent of the new version of the electricity network charge of the regular network charge regulation has been added to the network charges. The threshold has been freed so that large consumers stabilize the grids by their uniform Stromten. Photo: ALUMINUM was already 50 percent purchased years ago, emphasizes the German Metalworkers Association (WVM). With that said, the exempted company adoption of the energy turnaround was nete role in the electricity price increases of the men more than 7,000 hours a year (of including that companies with more than recent time, according to the economic association a total of 8,750 annual hours) and a total of 7,000 hours of electricity consumption and electricity - Metals (WVM). Obtain more than 10 GWh of electricity per year. Consumption of more than 10 gigawatt hours Also the assertion that the energy-related companies are actually only affected by the exceptions that are continuously exempt from network charges. high electricity consumption, the grid consumes a lot of electricity in particular. Your Liberation The energy-intensive industries strongly point, not true. The opposite of the network charges is not a bonus, including the claim that there are several cases, stresses the WVM. According to the trade association, the large buyers, which result from their important role as a result of one hundred large consumers from industry, provide for the network through their equal, according to the trade association, an exception to the network fees for low-cost electricity purchases throughout the year for metals. And electricity, which is more expensive for everyone else, results in an even load on the networks. Aleris builds foundry for Al-Li alloys Aleris will build a special foundry for aluminum-lithium plates and sheets. The plant will be built at the Koblenz location; the products are primarily intended for the aerospace industry. Aluminum-lithium alloys are lighter in weight than conventional aircraft alloys without compromising strength, corrosion resistance and fatigue resistance. The new system will be able to use particularly large blocks for tests as well as for the series production of aluminum-lithium products. The design of the plant will also simplify the development of new, conventional alloys in order to offer customers the most modern and sustainable solutions. Production in the new foundry is scheduled to start in the first quarter of 2013. Bühler integrates die casting business into AGIn January 2012, the technology company Bühler integrated its die casting business, Bühler Druckguss AG, into Bühler AG. At the same time, the German subsidiary Bühler Druckgiessysteme GmbH was integrated into Bühler GmbH. The integration measures serve to simplify processes and procedures. This is intended to further improve customer benefits. Bühler plans to strengthen Germany as a location by expanding sales and customer service. The business processes in Switzerland and Germany have already been adapted to the new situation. Almost nothing will change for customers and suppliers, the previous contact persons in sales and service will remain. Bühler is active in over 140 countries and employs around 7,800 people worldwide. In the 2010 financial year, the company generated sales of CHF 1.9 billion. ALUMINUM · 1-2 / 2012 NEWS IN BRIEF Alcoa cuts global capacity by 12 percent Alcoa Aluminum flagship Alcoa has announced it will close or curtail about 531,000 tonnes (12%) of its global smelting capacity, to lower its position on the global aluminum cost curve and improve competitiveness. The company will permanently close its smelter in Tennessee, which was curtailed in 2009, along with Ingots produced at Alcoa Tennessee two of the six idled potlines at its Rockdale smelter in Texas. Together, these closures will reduce Alcoa's global smelting capacity of 4.5 million tpy by 291,000 tonnes, which corresponds to seven percent. Some days later, Alcoa added it would curtail operations at three European aluminum smelters as part of the capacity cutback. This applies to the company’s Portovesme smelters in Italy as well as to the La Coruña and Avilés smelters in Spain. These facilities are among the highest-cost producers in the Alcoa system. At Portovesme, Alcoa will begin the consultation process to permanently close the 150,000 tpy smelter. The La Coruña and Avilés curtailments are planned to be partial and temporary. Capacity at La Coruña and Avilés is 87,000 and 93,000 tpy, respectively. The cutbacks of the three European smelters will reduce Alcoa's global smelting capacity by an additional 240,000 tonnes or about five percent, and are expected to be complete by the first half of 2012. The curtailments will contribute to Alcoa's long-term goal of improving its position on the world aluminum production cost curve by 10 percentage points and thus increase the company's competitiveness in the current volatile aluminum marketplace. Aluminum prices have fallen more than 27 percent from their peak in 2011. “These are difficult but necessary steps to improve Alcoa's competitiveness, preserve and grow shareholder value and protect jobs in the rest of the Alcoa system,” says Alcoa chairman and CEO Klaus Kleinfeld . In addition to the curtailments, Alcoa will accelerate actions to reduce the escalating cost of raw materials. Alcoa's alumina production will be reduced across the global refining system to reflect the final curtailments in smelting as well as prevailing market conditions. This will contribute to the company's long-term goal of lowering its position on the world aluminum production cost curve by ten percentage points. Alcoa announced a loss from continuing operations of USD193m in Q4 2011 on restructuring charges associated with the closure and curtailment of high-cost production capacity, lower aluminum prices and continued market weakness. Excluding the net negative impact of restructuring and other special items, the loss from continuing operations was USD34m. Aleris builds casting facility for aluminum-lithium alloys Aleris will build a specialized casting facility for aluminum-lithium plate and sheet products. The facility will be built at the company's German plant in Koblenz; the products are destined to meet the needs of the aerospace market. Aluminum-lithium alloys enable aircraft manufacturers to increase fuel efficiency through the weight reduction provided by aluminum while maintaining strength as well as corrosion and fatigue resistance. ALUMINUM 1-2 / 2012 The new facility will be able to cast full-scale ingots for trials as well as for serial production of aluminum-lithium products. Moreover, the design of the facility will facilitate the development of new conventional alloys to provide customers with the most advanced and sustainable solutions. Production in the new casting facility is expected to start in the first quarter of 2013. New BA president for Sapa Profiles The recent years ’rapid growth has made Sapa the largest aluminum profiles company in the world. In order to better capitalize on the synergies within the profiles area and streamline the operation, Sapa Profiles will be organized as one business area. New business area president will be John Thuestad, as from 1 February 2012. He will be a part of the corporate management team at Sapa and report to Sapa president and CEO, Svein Tore Holsether. In addition he will take on the role as business area president for Profiles Europe. Sapa Profiles will set up its new head office in Lausanne, Switzerland, and John Thuestad will re-locate there. Novelis to invest USD50m for new Brazil can stock coating line Aluminum producer Novelis Inc. will invest some USD50m to install a coating line for beverage can end stock at its Brazilian rolling and recycling complex in Pindamonhangaba, the company has recently said. In November last year, Novelis announced plans to invest USD32m to expand recycling capacity at its Pindamonhangaba complex, which will nearly double the plant’s used beverage can (UBC) recycling capacity from 200,000 to 390,000 tpy. That investment came on top of a previously announced USD300m rolling mill expansion at Pindamonhangaba. Hydro curtails production in Kurri Kurri, Australia In response to low metal prices and the uncertain market outlook Hydro has decided to cut production at its Kurri Kurri aluminum smelter in Australia. This step will be done by closing Potline 1, representing an annual production of 60,000 tonnes. The production line is expected to be fully curtailed in March. 150 jobs will consequently become redundant. The cost of curtailing potline 1 is estimated at approx. USD20 million. Kurri Kurri, fully owned by Hydro, has three production lines with a total annual production capacity of 180,000 tonnes. 7 NEWS Change in Management Board W of SMS Siemag AG Kay Mayland, Chairman of the Management Board of SMS Siemag AG and member of the management of SMS Holding GmbH, resigned at the end of 2011 as planned for reasons of age and switched to the Supervisory Board of SMS Siemag AG. Burkhard Dahmen, Member of the Board of Management for Steelworks / Continuous Casting Technology at SMS Siemag, took over as CEO of the company with effect from January 1, 2012. At the same time, he becomes a member of the management team of SMS Holding. His successor as Managing Director of SMS Siemag will be Guido Kleinschmidt, previously a member of the company's Steelworks / Continuous Casting Technology Division. Alexander Tutsek, owner of Refratechnik, deceased In September 2011, Alexander Tutsek, owner of the Refratechnik refractory group, died at the age of 84. Alexander Tutsek expanded the company, which was founded in 1950 as Steinwerke Feuerfest Karl Albert, under the name Refratechnik, into a global group with an annual turnover of around 400 million euros and 1,500 employees. Refratechnik is today the world market leader in the field of basic bricks and complete systems in the cement industry and a system provider, especially in the steel and aluminum industry. With production facilities in Germany, Spain and China, Refratechnik has an annual capacity of around 400,000 tons of burnt stones, 50,000 tons of unshaped products and 120,000 tons of MgO in Canada. Alexander Tutsek was CEO of Refratechnik Holding GmbH until recently. The legal successors are the non-profit Alexander Tutsek Foundation and a family foundation. As new shareholders, both foundations guarantee the continuation of the company in the spirit of Alexander Tutsek. The operative business is carried out by the companies Refratechnik Cement GmbH in Göttingen, Refratechnik Asia Ltd. in Hong Kong, Refratechnik Steel GmbH in Düsseldorf and Baymag Inc. in Calgary, Canada. 8 Scheef metal foundry Production expansion in Brandenburg The Scheeff metal foundry has been producing cast aluminum in the Bavarian town of Nersingen for more than 50 years, with an average annual double-digit growth rate, as the managing partner Manfred Meier emphasizes. Over time, it became more and more difficult in Nersingen to produce the increased volume on the existing area. An already planned plant expansion in Thuringia was not implemented in 2008 due to the general economic crisis. In a new attempt, the decision was made to expand in Hennersdorf, Brandenburg. Scheef GmbH will start with the permanent mold casting production at this location. Later sand casting is to be produced with two molding plants, which also makes it necessary to expand the hall. In addition, a new molding line is currently being installed, which is scheduled to start up in February 2012. According to Meier, this molding line will be the largest and most modern in the aluminum foundry industry. The periphery is also being completely modernized. The total investment volume is around 16 million euros by 2014. The company's customers such as Audi, Porsche, VW, MAN, Deutz, Liebherr, Daimler, Volvo and Scania are demanding ever larger components. Scheef aims to be active on the market in all sizes. The intention in Hennersdorf is to cast unit weights of 0.5 to 12 kg, while in Nersingen they are preparing for larger weights per cast part up to a maximum of 80 kg. DIN EN 1090 in focus Execution of steel and aluminum structures The European unity for steel and aluminum structures is getting closer. In order to be able to fall back on uniform standards for steel and aluminum structures across Europe, there are Eurocodes for dimensioning and DIN EN 1090 for execution. The three-part European series of standards DIN EN 1090 will be binding throughout Europe from July 1, 2012 and will replace the previously valid standards DIN 18800-7 for steel structures and DIN V 4113-3 for aluminum structures. Until then, however, there will be a coexistence phase during which metal structures can still be manufactured according to the previous national rules for dimensioning and execution. Nevertheless, you should familiarize yourself with the upcoming changes now. DIN EN 1090 contains extensive information on the certification of factory production control. In the future, these requirements must also be taken into account by metal construction companies that were previously classed as class A according to DIN 18800-7. The changeover to the Europe-wide standard is a major challenge for many companies. This publication helps to successfully master the changeover: That is why the DVS guideline 1711 and the DVS data sheet 1712 are part of this publication. While DVS guideline 1711 contains “Requirements and procedures for the certification of manufacturers according to DIN EN 1090-1”, DVS leaflet 1712 describes “in-house production control according to DIN EN 1090-1 / -2 using the example of an extension balcony in EXC 1". Above all, DVS 1712 provides companies that were previously assigned to class A with assistance in implementing the requirements for in-house production control. In addition, this publication also contains explanatory information on which metal construction products are to be assigned to which execution class (EXC). On the initiative of DVS, these explanations were drawn up in 2010 and already published in the DIBt-Mitteilungen by the Construction Technology Commission of the Construction Ministers' Conference. This publication is intended to help you keep your bearings on the way to a European unity for steel and aluminum structures. It is worthwhile to be open to the innovations of DIN EN 1090 and to face the changes. The standards that apply across Europe make products and services measurable and comparable. The companies that orient themselves to these standards improve their chances in the European competition. DIN EN 1090 in focus: Execution of steel and aluminum structures, 56 pages, 5 figures, 14 tables, ISBN: 978-3-87155-607-4, published: September 2011, EUR 58, - ALUMINUM 1-2 / 2012 NEWS IN BRIEF Magna acquires BDW castings operations sales of approximately 160 million euros. On completion of the transaction, Cosma will acquire two operations in Germany, one in Poland and one in Hungary. BDW’s current customers include Volkswagen, Audi, Porsche, Mercedes-Benz, Ferrari and ZF. Closing of the transaction is expected to occur BDW Cosma, an operating unit of Canadian Magna International Inc., has signed an agreement with the shareholders of BDW technologies, pursuant to which Cosma will acquire BDW’s four operations. BDW is an industry leader in vacuum high-pressure aluminum die casting and expects full-year 2011 total in the first quarter of 2012, subject to obtaining all necessary regulatory approvals including anti-trust approvals. The acquisition expands and complements Cosma’s ability to deliver lightweight solutions for complex body-in-white structural and chassis components in steel, aluminum or aluminum-steel hybrid to customers around the world. The combination of Cosma’s proven record for body structure and chassis engineering with thin-wall aluminum casting capabilities will further enhance its position in the industry. “The technologies gained from BDW will complement the low-pressure casting capabilities we recently acquired from Grenville Castings in Ontario, Canada,” said Horst Prelog, president of Cosma. Cosma International manufactures a comprehensive range of metal body systems, components, assemblies and modules including complete vehicle frames, chassis systems and body-in-white systems using a variety of innovative processes such as hydroforming, stamping and roll forming. Cosma International has 47 manufacturing facilities and 25 product development and engineering centers worldwide. BDW casting cell with closing force of 3.200 tonnes Kobe Steel to form aluminum joint venture in China Kobe Steel has tied up with Jiangsu Alcha Aluminum, a major producer of aluminum rolled products in China, to expand its aluminum business. Kobe Steel and Alcha have signed a letter of intent to establish a joint venture in Baotou, Inner Mongolia, to produce and sell aluminum coil and sheet. After conducting a detailed feasibility study, both companies plan to sign the final agreement in spring 2012. The joint venture, which is planned to be established in January 2013, is envisaged to be 80% owned by Kobe Steel and 20% by Alcha. Capital investment is earmarked at approx. 40 billion yen (€ 402m). The company will mainly produce aluminum coil and sheet for automobiles and beverage cans. Production capacity at the joint venture will be 200,000 tpy. While the company name is yet to be decided, the operation will be capitalized at 2 billion RMB (about 24bn yen). Start-up of operations is anticipated in 2015. With demand for aluminum sheet in China rapidly increasing in recent years, Japanese, US and European customers have accelerated ALUMINUM 1-2 / 2012 their push into the Chinese market. Demand for aluminum sheet for automobiles and beverage cans, which are major products at Kobe Steel, is anticipated to grow significantly in the coming years. But only a limited number of manufacturers in China can currently make these products as advanced production technology is required. The new joint venture will produce aluminum sheet in an integrated operation, from melting and casting to hot and cold rolling. T the joint venture plans to install state-of-the-art equipment to produce some of the world's largest aluminum coils. Baotou in Inner Mongolia, where the plant will be constructed, is close to abundant energy resources and has a skilled workforce. These factors will give the joint venture a competitive edge, says Kobe. Listed on the Shenzhen Stock Exchange, Alcha is a major manufacturer of aluminum rolled products. The partner companies are working on starting up the joint venture, with Alcha assisting in equipment procurement and permitting. n n3 - / 3 n44- / 3 n '/ 5 // 33 - // 3' / 5 // 3 '/ 5 n 3-6 - / 3-6 n + / + / n4 // 4 n / 3 n -33- / / n03 / 3 0/3 n, 4. / 6 / - /, 4. / 6 / / n! 73423 // 42 n & 23 // n * -1 / 0332 3 2 ',! - /5/33/.#. $)% ',! (- / 5/33 /.#. $ 8 +. / 31-4 / 8 "3/4 /./ 3 * / 8" -7 * / 666 // 8 / -0 // 6 6 / / - 9 NEWS SMS: Incoming orders in 2011 above previous year's level in industrialized countries According to figures, around EUR 3.4 billion. As Heinrich Weiss, Chairman of the SMS Meer Werkstatt in Möchengladbach of the SMS Group, explained in a company report that the number of projects ready for award is still stable, but since the middle of last year there has been increasing reluctance to do so Contract award noticeable - both for larger projects in the developing and emerging countries as well as in the classic ones secured in 2012. The number of employees in the SMS group has increased through the takeover of more than 90 percent of the shares in elexis AG, Wenden, and increased to around 10,600 employees as a result of a further increase in the number of employees in China and India en, that is an increase of 15 percent. As Weiss further explained, SMS used the past time to further intensify technical development and to rationalize processes. Now it is important to further reduce manufacturing costs through assembly-optimized designs, greater efficiency in logistics and increasing productivity in engineering and production. To this end, the investment programs that have been adopted will be continued as planned. This also includes the 60 million euro investment by SMS Meer in the Mönchengladbach location. Three quarters of all existing machine tools are being replaced there. In addition, the heavy-duty hall will be expanded by around 4,000 square meters. In addition, SMS Siemag is currently building for around 20 millionEuro opened a workshop near Shanghai, which will be completed in spring 2012. In Hilchenbach, the headquarters of the family company founded more than 140 years ago, the investments totaling 80 million euros over several years to create one of the most modern heavy engineering workshops will be completed in the course of this year. 11th Forming Technology Colloquium Darmstadt, 6./7. March 2012 “Flexible Forming Technology” Kuka receives major order from the automotive industry In the fourth quarter of 2011, Kuka Systems received a major order for the high-precision joining of aluminum body components. An international premium manufacturer commissioned the company with the engineering and construction as well as the assembly and commissioning of three automated production cells. Plant construction has an order volume in the mid double-digit million euro range. Body parts such as fenders and engine hoods are formed on the system. Kuka integrates 125 industrial robots in the cells and programs the control system in order to guarantee the highest quality process tasks such as clinching, gluing and folding the components. 10 The Forming Technology Colloquium Darmstadt (UKD) is a two-day lecture event that traditionally takes place every three years in spring in Darmstadt. As an information event and communication platform, the UKD is aimed in particular at specialists and executives in production technology companies as well as scientists from production technology and related fields. Speakers from industry and research report in their presentations on current developments and innovations in production and forming technology, but also on the productivity of a company with regard to the flexibility in production that customers are increasingly demanding. The conference program includes 20 lectures over four half-days. The topics of the lecture include: "Modular machine and feed system for stamping technology", "Flexibility in the production of components produced using forming technology through process-adapted semi-finished products", "Deep rolling with minimum quantity lubrication for hydrostatic tools", "Roll profiling in transition", "Hot forming of magnesium Flat products ”,“ Development of highly formable aluminum alloys for the automotive industry ”. The length of the lecture is around 25 minutes, each followed by a short discussion. Around 200 participants from mechanical and plant engineering, the automotive and supplier industry as well as universities and associations are expected. The venue is the Lufthansa Training & Conference Center in Seeheim-Jugenheim. More information at www. ukd2012.ptu-darmstadt.de ALUMINUM · 1-2 / 2012 NEWS IN BRIEF Call for papers begins for TC Prisma - a powerful material precipitation modeling software the conference parallel to ALUMINUM 2012 trade fair Thermo-Calc Software AB and QuesTek In- We ' re excited to have partnered with ThermoThe German Aluminum Association GDA (Gesamtverband der Aluminiumindustrie) together with Reed Exhibitions are planning and organizing the conference accompanying the ALUMINUM 2012 trade fair. Under the name "Aluminum - Material for the Future" presentations are planned on the subjects of processes, transport, automotive, surface and aluminum markets. Specialists from companies, research institutes and universities are warmly invited to submit presentations on these subjects. The submitted contributions will be examined by a program committee, which may also permit other subject areas. The contributions will be compiled into a publication and made available. The submission deadline for the abstracts is 23 March 2012. Details on the call for papers can be found at www.aluminium-conference.de novations LLC have jointly developed 'TCPrisma', a new user-friendly software package available from Thermo-Calc Software for modeling precipitation in multi-component and multi-phase systems, which is used in conjunction with well-established Thermo-Calc and 'Dictra' software. TC-Prisma evaluates concurrent nucleation, growth and coarsening, and incorporates key models and algorithms from QuesTek's' PrecipiCalc 'precipitation simulation software, which QuesTek has used as part of its' Materials by Design' technology to computationally design novel new alloys such as' Ferrium 'M54, S53, C61 and C64 for use in aerospace, defense, energy, racing and other industries. Charlie Kuehmann, QuesTek’s president and CEO, commented: “The launch of TCPrisma software is very timely given President Obama’s recent establishment of the Materials Genome Initiative, since TC-Prisma is an important new tool for materials design engineers to computationally design materials. Calc Software, a premier leader in scientific software and databases that involve computational thermodynamics and diffusion-controlled simulations, to accelerate the adoption of integrated computational materials engineering (i.e. ICME) tools. " Anders Engström, Thermo-Calc Software’s president, added: “TC-Prisma is new, robust, precipitation modeling software built by two globally-recognized leaders in computational modeling, analysis and material design, which significantly enhances Thermo-Calc and Dictra. To develop TC-Prisma we're pleased to have partnered with QuesTek and incorporated key aspects of their PrecipiCalc software, since QuesTek is well-known for their application of computational materials engineering, software and databases to rapidly design new materials that meet user-defined needs. " More information about TC prism at www. thermocalc.com/TC-Prisma.htm 6th Middle East Aluminum 2012 Conference, 5 to 7 March in Dubai, UAE The 6th Middle East Aluminum 2012 Conference gathers together the key aluminum producers and downstream fabricators to discuss the opportunities connected with the massive expansion of the regional aluminum sector. Middle East Aluminum 2012 will be discussing the region’s progress towards becoming a leading player in the global aluminum market through updates on production capacity, dynamic demand and the development of the downstream business. The comprehensive agenda will also look at the forward pricing of aluminum and the market opportunities and challenges ahead. Join C-level executives and senior representatives across the aluminum value chain including aluminum end-users, extruders, rolling mills, casthouses, smelters, traders, equipment and technology providers and consultants at this premium gathering for the region’s aluminum industry. Key speakers include representatives from Midal Cables, Garmco, Balexco, Gulf Aluminum Council, EAFA, Oman Aluminum Rolling Co., CRU Group, London Metal Exchange. More information about the conference at www.middleeastaluminium.com 03.03.2012, hall 15, booth F 46. You're in good hands ... ... we have all the pieces. www.rosler.com BDA5024K58 = 8B78 = 6KUKB7> CK1; 0BC8 = 6 Innovative solutions from the world's leader in surface finishing 3ÚTMFS0CFSGMÊDIFOUFDIOJL (NC) t6OUFSNFS [CBDIt (FSNBOZt5FMt'BYtJOGP) - 59TMAFSDPN! ) 5 !! 1 ") 50% 8 * () 6 32% 76) <) 1 &) 5 6-2 ((-) 37-) 582+) 2 * @ 5 081-2-81 -2 300% 5:) - 7 ) 5 <[email protected] '/ +) +% 2+) 2 #) +) 2 () 6 6-', +0) - ', <) - 7- +% & 6',:> ',) 2 () 2 853 +) +) [email protected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email protected], 82 +) 2 81) -2))) 2 (- + 82+) 223 ', (-) 1) -67) 232681) 27) 2+) () 5) 8534> - 6 ',) 2', 80 () 2 / 5-6) + -2 +) 2,) 21-79356 - ', 7 - +) 147-1-6186-2 (% 6% 8', - 1 ) <) 1 &) 5829) 51-2 () 57:) - 7) 5%, 5! 0) 7 <7) 285 ', 6', 2-776:) 57)) <) 1 &) 5 39) 1 &) 5/73 &) 5) 47) 1 &) 5 8 + 867 80- 853 853 853 853 853 853 50 0 –50 2003 2004 2005 2006 2007 2008 2009 2010 2011 0) 7 <7) 285 ', 6', 2-776:) 57) 2,500) <) 1 &) 5 39) 1 &) 5/73 &) 5) 47) 1 &) 5 8 + 867 80- 2,000 853 853 853 853 853 853 1,500 2003 2004 2005 2006 2007 2008 2009 2010 2011 1,000 5,000 0) 7 <7) 232% 76) 2 (:) 57)) <) 1 &) 5 39) 1 &) 5/73 &) 5) 47) 1 &) 5 8 + 867 80- 3 3 3 3 3 3 4,000 3,000 2,000 1,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 00) 2 +% &) 2% 8 * (-) 6) 5) -7) 6-2 (829) 5 & -2 (0- ', 8) 00) !! =% / 78) 00) #) 57) 827) 5 ::: 75 -1) 7 () 3 () 51-7 () 5 44 * @ 5 (% 6-, 32) 12 ALUMINUM 1-2 / 2012 '(/ + /' /,) - / + * / - / - - "%! && ##" $! $. ECONOMY Production data of the German aluminum industry Primary aluminum Secondary aluminum Rolled products> 0.2 mm Pressed & drawn products ** Production (in 1,000 t) + / in% * Production (in 1,000 t) + / in% * Production (in 1,000 t) + / in % * Production (in 1,000 t) + / in% * Nov 35.9 46.3 52.6 -4.4 158.2 6.1 50.8 11.8 Dec 37.2 42.2 41.7 - 1.6 123.4 12.9 31.3 17.7 Jan 11 37.1 37.7 50.4 9.9 154.9 11.9 44.8 18.2 Feb 33.8 32.2 54, 2 6.4 161.1 9.2 47.3 11.1 Mar 37.0 21.9 58.5 1.9 173.7 0.8 53.1 4.0 Apr 35.7 15.1 53, 2 4.5 156.6 -2.3 47.3 7.4 May 37.1 7.9 56.7 5.8 168.3 3.7 56.1 18.3 Jun 35.9 3.3 51 , 1 -10.0 133.5 -19.3 49.2 -8.4 Jul 36.7 0.5 52.3 5.2 164.9 4.2 50.7 0.4 Aug 37.0 0 , 3 45.9 -0.3 159.5 -4.8 50.8 5.0 Sep 35.1 -2.3 54.9 2.4 152.2 -5.4 53.8 5.8 Oct. 36.1 -2.9 53.5 2.8 148.6 -8.1 49.8 -1.9 Nov 35.2 -1.9 57.0 8.5 152.8 -3.5 53, 2 4.7 * compared to the same month last year, ** rods, pro fi les, tubes; Announcement from the General Association of the Aluminum Industry (GDA), Düsseldorf Primary aluminum rolled products> 0.2 mm W 14 Secondary aluminum pressed and drawn products ALUMINUM · 12/2011 Higher quality. Increased productivity. Reduced environmental impact. Let us show you how. Ali H A M Al Zarouni Vice President: Smelter Operations Developing best in class smelter technologies through innovation. Since our inception in 1979 we have dedicated ourselves to establishing DUBAL as a world-class supplier of aluminum to global markets. You might put our success down to an unswerving focus on quality and the unparalleled 99.99% purity of our products. But it is also the innovative thinking behind our proprietary, high amperage DX and DX + smelter technologies which has helped make us what we are today. Leadership through innovation. That's what sets us apart. And you can quote us on that. Together we shine For more information call: +971 4 884 6666 www.dubal.ae ECONOMY Conference report Arabal 2011 focusing on Oman's aluminum industry From 13 to 15 November 2011 over 400 delegates from 30 countries attended the Arabal Conference, held for the first time in Muscat, the Capital city of the Sultanate of Oman. The participants came mainly from the aluminum world in Arabia, but from Europe and Asia as well. The host of this year’s event was Sohar Aluminum. Under the heading Global Challenges for Sustainable Growth in the Aluminum Industry and the Role of the Gulf Smelters ’, the more than 20 lectures dealt mainly with the further development of the aluminum industry in Arab countries. Held for the first time in Oman, the Arabal Conference focused on the growing importance of the aluminum downstream business in the Sultanate. Images: Arabal B. Rieth, Meerbusch HE Sheikh Saad Bin Mohammad Al Saadi, Minister of Commerce and Industry in Oman At present, in Sohar Aluminum the Omanization policy has achieved a success rate of 70 percent, which is to increase to 85 percent by 2015 This should not only ensure that in the medium term a job is available for every citizen, but also reduce the country's dependence on a foreign workforce. In this connection the flagship Sohar Aluminum is not just regarded as an aluminum smelter, but as the center of a cluster in which, in the future, 60 percent of the smelter aluminum produced will be fur- executive of the group, also stressed the importance of Sohar Aluminum and does not exclude a possible capacity enlargement there by 2014. RTA has a close relationship with Oman through its 20 percent shareholding in Sohar Aluminum. Globally, RTA anticipates a yearly aluminum production growth rate of six percent. A reason for this dynamic growth is the increasing urbanization in the economically developing countries, which will go hand in hand with a rapid increase in demand from the building, transport and packaging sectors. In the medium term RTA expects to see a doubling of the present production levels of both aluminum and copper. Sohar Aluminum - a benchmark in the aluminum smelting industry In his welcoming address HE Sheikh Saad To the participants in Arabal 2011 and those Bin Mohammad Al Saadi, Minister of Comwho went on the plant tour of the smelter some merce and Industry in the host country Oman , 200 km away in Sohar, Sohar Aluminum was stressed the importance for his country of the perfect host. The company was formed extension of an aluminum industry that in September 2004 to undertake a land includes the entire value chain, from smelter mark greenfield aluminum smelter project production to further processing. Besides the in the Sultanate of Oman. Jointly owned by development of infrastructure, including the Oman Oil Company (40%), Abu Dhabi Naenlargement of the port of Societal Energy Company PJSC and the domestic power generation - TAQA (40%) and Rio Tinto industry, it is a particular concern Alcan (20%), Sohar Aluminum of the country to create jobs. In reached full capacity on 19 Febthis respect Oman differs from its ruary 2009 and some 30 months neighbors where, at least in the later celebrated its one-millionth initial phase, substantial capacitonne of aluminum produced. ties for the production of smelter In that time capacity was up aluminum on the basis of cheap graded from 350,000 to 375,000 energy and foreign workers have tons a year. The total costs for been created and from there the smelter capacity, amount to metal is exported to industrialized USD2.4 billion. and developing countries all over The national importance of the world for value-adding further the company is demonstrated by processing. The Sultanate of Oman the fact that 56 percent of its anregards its gas and oil reserves as nual spend is in the local market, valuable raw material for ensuring The Arabal Conference attracted some 400 delegates from over 30 countries which equated to USD50 million its future national prosperity, by in 2010. the rational use of which urgently needed jobs ther processed into semis and finished prod Soar Aluminum is supported by an imfor the coming generation should be provided. ucts. Since reaching its full capacity of 375,000 pressive and comprehensive infrastructure. The proportion of people under 20 years old tonnes a year in February 2009, the plant in Its facilities include one of the world's fastest, the port city of Sohar has already created growing ports and a power plant and smelter in Oman is higher than 40 percent. In the implementation of this strategy - the 1,000 jobs in the area close to the smelter. In which use the latest technology and employ ‘Omanization’ of the economy - Sohar Alu- addition, a further 2,500 jobs should be created the best practices. Within the Port of Sohar the minimum is playing an important part. The aim is in the downstream sectors. company has its own dedicated port facility, of Omanization is to replace foreign workers With regard to the global activities of which supports vessels with a capacity of up to by Omani citizens active in the jobs available. Rio Tinto Alcan (RTA), Jacynthe Côté, chief 75,000 tonnes for receiving raw materials and 16 ALUMINUM 1-2 / 2012 for exporting primary aluminum. The port facility includes a bulk material ship unloader with connecting conveyors and a range of silos for storing alumina (2 x 60,000 t), petroleum coke (2 x 15,000 t) and liquid pitch (2 x 5,000 t). The Sohar Aluminum Power Plant (SAPP) lies at the core of Sohar Aluminum’s operations. SAPP is a state of the art 1,000 MW combined cycle, captive power plant. It achieves close to 50 percent efficiency in converting gas energy into electricity and meets the stringent requirements set out by Oman’s environmental agency MECA. SAPP is strategically positioned to maximize access to the region’s plentiful natural gas reserves and to have access to the Gulf of Oman for cooling water. SAPP excels by achieving high levels of efficiency, reliability and availability of power whilst ensuring low emissions, operating costs and environmental impact. Sohar Aluminum operates the world's longest single potline with a length of 1.2 km and is the first smelter in the world that uses Rio Tinto Alcan's AP36 smelting technology - one of the most energy-efficient and productive smelting technologies commercially & $! $ '$ $ % "%)" $ $ $)% "'& $%' '$ $) $ $ $$' '%' $$ $% # $ $%"%) Sohar aluminum "&% '$ $) Sohar aluminum potline complex available. With an operating current of 360 kA which has gradually been increased to 375 kA, the company produces 375,000 tonnes of aluminum a year at purities of p1020 and above. The smelter also has an on-site carbon facility for the production of rods and its own anodes, to ensure maximum efficiency and availability to the smelter. The Rhodax crusher used on site has one of the highest production capacities in the world. The casthouse is another source of pride. The company operates an ingot caster with a throughput of 27 tons an hour, which is the world's highest known output performance. The castho also use features a 25-tonnes an hour sow caster. Sohar Aluminum produces metal in three formats: 23.7-kg ingots, 700-kg sows and liquid metal available to local downstream partners to reduce energy consumption in subsequent processing. Aluminum semis, which in the present phase of enlargement cannot yet be absorbed by local markets, are sold by RTA to Asian markets such as China, Malaysia and Indonesia. % $$% (% $ '"% #%%"' "$ '% $" $') "%% '") $ (%%%% &%' $ #% "%)"% & $% ! #! % '$! %%! % '%%! $ #! "!)" $% $ $ ")" $! %!%%! $%% "!)"% & $ %%% (% $) * &%! ' * '' "% # $) Sohar Free Zone - Oman's future aluminum center Part of Sohar Aluminum's overall strategy is to promote and support the establishment of a robust downstream aluminum industry in Oman, to create added value for primary aluminum and to develop Oman's economy , in order to create further employment and business opportunities.Two hundred hectares of land adjacent to the smelter site in ALUMINUM · 1-2 / 2012 ##) ##! "! # $) ##!" "('&&& ##% ##!" ECONOMY tonnes a year is on the one hand lower than the economically viable limit of a conventional plant consisting of a rolling slab casting unit and hot and cold rolling mills, but on the other hand relatively high for the alternative possible use of twinroll casting machines, a different solution was decided upon: the molten aluminum delivered by the smelter will be delivered via holding furnaces to a twin-belt caster. In this it will solidify into strips 2,032 mm wide and 13 to 21 mm thick. The solidified strip will go directly to a hot rolling mill where it will be reduced down to a thickness of 1 to 2 mm in an in-line / hot rolling process, and then coiled. This will then be followed by the usual cold-rolling process on a four-high reversing rolling stand with the necessary intermediate and final annealing operations. The capacity of such an in-line / hot rolling unit, for Fata EPC the Sohar Industrial Estate are set aside for downstream industry development . In f Future up to 60 percent of the annual production capacity of Sohar Aluminum will be sold on to the local downstream industry. Local companies can take advantage of liquid metal sales to manufacture all kinds of aluminum products. Besides aluminum processors such as OAPIL (aluminum rod and overhead line conductors), which have already been established in the vicinity of the smelter, from 2014 the Oman Aluminum Rolling Company (OARC) will be the largest purchaser of molten aluminum. This company, 100% owned by Takamul Investment Co., is currently investing USD387 million to build a major aluminum strip-rolling plant with a capacity of 160,000 tonnes a year, a level which should Schematic layout of the OARC rollling mill be reached after five years of operation. The main supplier is Fata EPC in Italy, which is at the same time acting as the general contractor. For this purpose Fata EPC is enlarging its establishment if Qatar with an additional location in Oman. The plant is designed for the production of strips made from alloys of the 1xxx, 3xxx and 8xxx groups, in widths up to 1,900 mm and in the thickness range 0.075 1.5 mm in the form of semi-finished coil products, i.e. foil stock for converter foil, packaging foil and cable wrap. In addition it will produce finished coil products such as fin stock and semi-rigid container foil, for example for aluminum food containers but also for the construction of cooling aggregates in the automobile and building sectors. Further products planned will be tension-leveled industrial sheet for building products in the thickness range 0.3 to 1.5 mm, and hot strip from 1.5 to 8 mm thick and up to 1,900 mm wide. The established strip and foil rolling plant Garmco in Bahrain, which from the first showed interest in the project, will undertake the marketing of OARC products during the initial phase. The concept of the plant is worthy of particular attention. Since the capacity of 160,000 18 a cast width of 2,000 mm, certainly amounts to 250,000 to 300,000 tonnes a year. This means that when the cold rolling and finishing capacities are increased accordingly, the plant can be adapted for future market developments with relatively little effort and costs. Provided in the finishing area are specialized slitting operations, a coil pain line and a specialized coil coating application. Aluminum production worldwide remain on the way to growth Besides the considerations relevant to Oman, during the event other matters of current interest in the context of a larger economic area were also discussed. Having regard to the present and future development of the worldwide aluminum market, even in the Near East it is hardly possible to avoid a glance at the Chinese market. Ultimately, China is a major purchaser of the primary aluminum produced in the Gulf area, but it is also a not insignificant supplier of aluminum finished products. Aluminum production in China, at any rate in the country’s eastern provinces, is confronted by rising energy prices. This is one of the reasons why over the coming few years expansion into the substantially more favorable North-Western provinces will take place. In summary, it was emphasized that despite all obstacles such as rising prices for energy and raw materials (alumina), but assisted by lower capital expenditure of less than USD2,000 a ton of aluminum compared with up to USD4,000 a ton elsewhere, for the next several years China will remain the driving force for the growth of worldwide aluminum production. The fact is, however, that 15 million tonnes of the worldwide production total of 21 million tonnes planned by 2016 will be produced by additional smelter capacities in China. In addition extensive investments in further processing, namely in new rolling and extrusion capacities, should not be overlooked. These are making China a net exporter of aluminum semis. Rather daring forecasts assume that China will reach the same per-capita consumption of aluminum (including the exported fraction) in a few years as is now typical of western industrialized countries. Very great potential for covering the future aluminum needs, besides the construction of new smelters, is seen in the promotion of recycling processes. The International Aluminum Institute (IAI) expects that in 2020, of the total demands amounting to around 110 million tonnes of aluminum, about 30 percent will be covered by recycling. Even in the Gulf, where the recycling of process scrap and end-of-life products is still hardly an issue for lack of a hitherto underdeveloped downstream industry, the concept of recycling is beginning to gain ground. In this connection a plan was discussed, for building up Oman as a recycling center for the whole of the Gulf region. At any rate, by 2020 the scrap yield is expected to be about 270,000 tonnes. With the event held in Muscat, Arabal showed that this conference is one of the most important occasions for the international aluminum industry. This also finds expression in the fact that the event, first held in 1983, no longer takes place as originally in a two-year cycle in one or other of the Arabian countries, but annually since 2010. So the next Arabal Conference will take place in 2012, in Qatar in November. The host will then be Qatalum, the joint venture between Qatar Petroleum and Norsk Hydro. Author Dipl.-Ing. Bernhard Rieth is a marketing specialist and freelance technical journalist. As proprietor of Marketing Xpertise Rieth in Meerbusch, Germany, he advises equipment partners of the NF metals semis industry on marketing-related matters. ALUMINUM 1-2 / 2012 ECONOMY Aluminum market outlook A year of uncertainty and challenge As the European debt crisis is spreading there were no words of optimism to be heard during December concerning not just the European economic outlook for 2012, but for the rest of the world too. At the beginning of this year, Spain’s government announced that its budget deficit in 2011 could be even higher than the last forecast of 8%. This would imply additional and continued pressure on the euro versus US dollar in the coming months and lead to stagnant or even lower base metals prices. However, support may come eventually from a rising oil price which will depend on developments in Iran, especially after the United States and the European Union introduced new sanctions as a reaction to reports that Iran is progressing with its nuclear program. In response, Iran has warned it could shut the strategically important Strait of Hormuz, a narrow shipping lane in the Persian Gulf, which would severely impede oil supplies, and has started testing long-range missiles. Against this background it is to be expected that despite a bleak economic outlook, the Brent oil price will remain volatile and relatively high - around and above USD110 during the first half of 2012 - with the possibility to rise sharply if there are further threats to shut the Strait of Hormuz. In this case base metals prices might get short-term support from high oil prices, only to plunge once the situation over Iran calms and the world economy becomes even more affected by high oil prices. 2012 or 2013, if not both years, would then turn out to be worse for base metals prices than in 2011. Moreover, 2012 would definitely be politically and economically more challenging than last year, but base metals prices may bottom out in 2013. Review of the economic situation Better than expected latest economic figures in the USA - the trend of unemployment during December fell to the lowest level in more ALUMINUM 1-2 / 2012 than three years - brought a much needed breath of optimism to the equity markets, which cheered base metals prices too. The December 2011 ISM Manufacturing Report, which tracks the manufacturing activity, heralded good news too: the PMI (Purchasing Managers Index) climbed from 52.7 index points in November to 53.9 points in December, which was above the expectations of analysts polled by Bloomberg. The Index has remained above the 50-level for two consecutive months, indicating sustainable growth in the manufacturing sector of the world's largest economy. The annualized December PMI corresponds to a 4% increase in real GDP annually, according to the report issued by the Institute of Supply Management early in January. China’s December PMI rebounded to 50.3 index points, compared with 49 points in November, indicating that the country’s manufacturing activity is expanding. A PMI reading above 50 demarcates expansion from contraction. However, this rise may be the result of seasonal bias in the lead-up to the Chinese Lunar Year, so December’s growth should be regarded with some caution. In that context, the sub-index for overall new orders increased to 46.9 in December from November’s 45, but also showed falling demand (below 50). New export orders dipped, reflecting waning demand from the US and Europe, but input costs incurred by Chinese manufacturers continue to moderate. The Euro zone Manufacturing Purchasing Managers Index rose slightly in December to 46.9 points from November’s 28-month low of 46.4, but still marked a fifth month below the 50 mark that denotes contraction. Germany made a good start in the new year G. Djukanovic G. Djukanovic, Podgorica with strong manufacturing, consumption and labor data in Europe’s largest economy. The closely watched Markit Manufacturing Indicator rose to 48.4 in December, up from 47.9 in November, reflecting the continued strength of Germany’s key industrial sector. The Ifo Confidence Index rose to 107.2 in December, from 106.6 a month earlier. According to the Ifo Institute, Germany’s economy will grow by a meager 0.4% this year, down from around 3% in 2011, and could slide into recession if the Euro zone debt crisis deepens. The US economy may grow by at most 1.5% in the author’s opinion, despite the latest forecast by the Federal Reserve that growth would be in the range of 2.5 to 2.9% in 2012, down from the 3.3 to 3.7% Fed forecast in June. Lower GDP growths in Europe and the USA would negatively affect GDP growth in China, bringing it down to a range of 7 to 8% in 2012 from around 9% in the last quarter of 2011. In case of a recession in Europe, economic growth in China might fall even more. Due to the European debt crisis, the Euro will remain under strong pressure in the coming months, heading towards 1.25 EUR / USD by the second quarter of 2012. Market participants remain skeptical in expectation of whether rating agencies will continue to downgrade European countries, with Slovenia being the last one, something that permanently undermines the Euro. The European Union summit early in December ended with an agreement by 26 of its 27 members to adopt measures aimed at easing the sovereign debt crisis in the short term and improving member states ’fiscal positions over the longer term. Each country’s government will have to ensure an annual budget deficit of no more than 0.5% of GDP with automatic fines for governments that breach a 3% deficit limit. Leaders in the European parliament have also proposed a ‘road map’ for common Euro-region bonds in a new European treaty on fiscal discipline. © 19 ECONOMY Aluminum demand slowing During November 2011, traders announced that large quantities of aluminum would enter LME warehouses before year-end, which proved to be the case. LME registered stocks increased by around 300,000 tonnes in just four working days in mid-December, ending the year at 4.97m tonnes which is an all-time record. However, most of these stocks are still November (30 days) was 2.121m tonnes, down from a revised 2.199m tonnes in October (31 days) but up from 2.057m tonnes in November 2010. Total world production is expected to amount to around 44.7m tonnes in 2011, an increase of some 7% yoy, while consumption will expand close to 8% to around 43.8m tonnes, compared to an increase of around 17% in 2010. tied up in financing deals of banks. Traders and analysts estimate that total aluminum inventories around the world stand at about 12m tons, though large quantities have been tied up in financing deals that were put in place in 2008/09. Industry experts believe that some 30 to 35% of the world's smelters are unprofitable with current aluminum prices below USD2,000 / t. What industry experts do not say is the percentage of those who protect the selling price by longer term purchasing contracts at levels higher than the current LME cash price and even higher than their production cost. This partially explains why about a quarter of world producers are still operating. Another explanation is that until recently most of the marginal (money losing) producers hoped market conditions would improve by the end of 2011 so that losses could then be compensated in the first quarter of 2012. Latest developments, however, have slashed such hopes and very soon producers will start to reduce their production or even close their smelters. World primary aluminum production averaged 70,700 tonnes / day in November 2011, down from a revised average of 70,900 t / day in October but up from 68,600 t / day in November 2010, according to the International Aluminum Institute. Total production in No- The aluminum price will trade in the range of USD2,000-2,350 / t in the next six months, according to the median estimate of 17 analysts surveyed by Bloomberg in early November. EUROPE: According to several trading sources European aluminum orders fell by around 20% in the fourth quarter of 2011 compared to the same quarter a year earlier, while aluminum premiums have dropped 25% since mid-2011. Some areas of demand, such as the packaging and construction industries, have contracted sharply, according to traders, especially in southern Europe. An aluminum trader for a large trading house describes Italy as a ‘disaster zone’. “Everyone has been having pushback on contracts this year in the second half,” he said. Traders were bearish on demand for the first half of 2012 and expect volumes to be lower, although this estimate might be politically induced and aims at lowering premiums, traders admit. Consumers have mostly deferred 2012 orders during the last two months in 2011 due to Europe’s deteriorating outlook which has led to producers ’metal becoming more freely available, metals industry sources say. The producers cleaned up their balance sheets for the fiscal year-end while most market participants wanted to sell, rarely to buy. This resulted in lower premiums for Western duty- 20 paid aluminum in the Rotterdam warehouse, quoted mostly in the USD145-165 / t range in mid-December, down from USD200-220 / t in August. Duty unpaid premiums were quoted at USD100-130 / t in that time. CHINA: China shut down about 630,000 tpy of primary aluminum smelting capacity in December due to negative margins, the China Economic Information Center (CEIC), which is a unit of the state’s Xinhua news agency, reported. At least 1.4m tons of annual capacity had already been made idle before December, taking the total idle capacity to around 2.03m tpy. More cutbacks are expected if aluminum prices fail to rebound, the report says. The CEIC put the production cost of China's higher-cost aluminum smelters at Yuan 18,000 / t (USD2,185 / t), notably those in the south-western regions, although Chinalco general manager Weiping Xiong gave the average Chinese production cost as Yuan 16,500 / t (USD 2.002 / t) at a recent industry conference. China imported 174,100 tonnes of primary aluminum between January and November 2011 and exported 76,500 tonnes during the same period, hence logging a net import of 118,100 tonnes compared with a net import of 40,300 tonnes for the same 2010 period, CEIC said. Demand from the semi-finished sector has remained healthy as semis output rose 2.5% month-on-month and 9.8% yearon-year to 2.128m tonnes in November. However, end consumption has shown signs of softening, especially in the sectors of home appliances and auto vehicles, coupled with flattening semis exports, according to CEIC, Platts reported. Chinese output of primary aluminum rose 10.2% y-o-y to 16.28m tonnes in the year to November, slowing from a 22.6% growth in the same period of 2010. Production in November was 1.4m tonnes. NORTH AMERICA: US service centers shipped 120,800 tonnes of aluminum products during November 2011, a 1.4% decline from October's 128,000 tonnes total, but a 9.5% increase against November 2010. Aluminum shipments from US centers until November 2011 were 1.392m tonnes, a 15.5 % increase against the 2010 period. As November ended, the centers had aluminum product inventories of 359,500 tonnes, a 3.4% increase against November 2010 inventories and a 0.4% increase against October’s inventory level. At the current shipping rate, US service centers have a 3-months supply of aluminum products, a 5.5% decrease from November 2010. In Canada, service centers shipped 13,200 tonnes of aluminum products during November- ALUMINUM · 1-2 / 2012 th 17 World Aluminum Conference 30 April-2 May 2012, Fairmont, Abu Dhabi, United Arab Emirates "% *% ** + + *), * +)! Så! $% $)) *) (* Så!% Så så # +) * * (* så +) så så # "!" * så.) (') “” "%))) * -% *) * $ + (*) & $ ECONOMY over, a 7.3% rise compared with the October total of 12,300 tonnes, and an increase of 4.7% compared with the October 2010 result. In the year to November 2011, Canadian centers shipped 136,700 tonnes of aluminum products, an 8.3% rise over the corresponding 2010 period. Canada’s centers reported 35,300 tonnes of aluminum in inventory at the end of November 2011, an increase of 14.0% against November 2010 and a decrease of 2.9% from October 2011.At the current shipping rate, this represents 2.7 months of supply of aluminum, up 8.8% from the corresponding figure in November 2010. According to data published by the US Census Bureau, US primary metal producers and metal fabricators registered a sharp drop in shipments during November compared with October, while inventories fell just slightly. Over eleven months, primary metals shipments grew 29.8% and new orders rose 26.1%. Fabricators ’shipping values ​​in November declined 6.3%, with new orders also down 6%. Meanwhile, shipping values ​​up until November grew 6% and new orders increased by 7.9%. Primary metal inventory values ​​inched down 0.7% while fabricators saw that figure fall by just 0.1%. The US Midwest premium fell to USD7.70 a pound in early December, down from USD8.20 two months ago, according to CRU. JAPAN: Japan’s shipments of rolled aluminum products decreased 6% in November y-o-y, the sixth straight month of decline as overseas demand weakened and cut exports. Supplies to domestic and export markets dropped to 172,576 tonnes in November from 183,613 tonnes a year earlier, the Japan Aluminum Association announced. The rate of decline accelerated from a 2.8% drop in October. Japanese exports of flat-rolled and extruded products slumped 34% in November after floods in Thailand disrupted the supply of components and reduced the production of cars and electric machinery. Aluminum premiums for Japan’s buyers were down 5% for the first quarter of 2012 compared to the previous quarter, and have been mostly set at USD112 / t over the LME cash price. Buyers pay a premium in addition to the LME cash price to cover freight and insurance and to reflect regional supply and demand. Japan imports around 2m tpy of primary aluminum. Aluminum stocks at key ports in Japan - Yokohama, Nagoya and Osaka - totaled 221,500 tonnes at the end of November, down 6% against the month before, trading house Marubeni reported. BRAZIL: Brazilian smelters produced 22 120,200 tonnes of primary aluminum in November 2011, down 4.9% compared with November 2010, according to the country’s national association Abal. Up until November 2011 production was down 6.6% to 1.31m tonnes. Norsk Hydro’s Albras produced the highest volume in November, 36,700 tonnes, down 2.1% year-on-year. CBA came second with 36,200 tonnes, a 5.5% decrease. Alcoa produced the same 29,100 tonnes as in November 2010, while BHP Billiton reported a 2.8% increase to 14,600 tonnes. Novelis produced 3,600 tonnes, a drop of 50.7%, since it closed one of its two smelters in Brazil late in 2010. Processed aluminum consumption in Brazil is expected to increase 9.3% y-o-y to reach 1.42m tonnes. For the first three quarters in 2011, consumption reached 1.04m tonnes, up 10.4%. The highest increase came from wire and cable, which accumulated 120,800 tonnes, a boost of 85.8%. This leads to the conclusion that Brazil is switching from copper to aluminum for the national electricity grid and other uses. Consumption of castings rose 10.9% to 176,500 tonnes in the first nine months of 2011. Sheet and plates rose 4% to 383,200 tonnes, extruded products 3.8% to 214,300 tonnes and foils 1.8% to 66,100 tonnes, all figures reported by Abal. On the back of the large increase of aluminum consumption, Abal expects imports to rise 48% to 399,300 tonnes in 2011. Imports totaled 305,500 tonnes in the first three quarters of 2011, up 74.7% yoy, while exports fell by 11.4% to 497,600 tonnes in the corresponding period, and are expected to reach 649,200 tonnes, a 14% decrease in 2011. Imports have been rising in Brazil because local smelters have not been investing in expansion or greenfield projects, as energy prices are considered very high in the country. As a consequence, Brazil is soon expected to become a net importer of primary aluminum. Alumina price on the decrease Spot alumina prices and alumina indexes continue to fall, in parallel with the aluminum price, ending the year at around USD300 / t on a fob basis, with low market activity in expectation of an ongoing decrease of the price. Some traders expect the price to slip below USD300 / t in January, though China has lately been a stabilizing influence, with several parties expressing potential demand for February shipments at around USD300 / t. European and Asian consumer sources put buying offers at USD305-335 / t, with the selling interest range at USD340-350 / t in recent weeks. China’s costlier domestic alumina cargoes and yuan-denominated trade financing rates have been fueling interest in imported alumina, sources said. Platts Chinese domestic alumina assessment at Yuan 2,650 / t (USD420 / t) exworks Henan would have equated to USD325 / t in import parity terms, after taking into account Yuan 80 / t in domestic handling costs, the day's yuan-dollar exchange rate, 17% in VAT and USD23 / t in freight for 30,000 tonnes from Western Australia to Qingdao in northern China, for shipment in February. Chinese alumina production may reach 43.5m tonnes in 2012, which is an 11.5% rise y-o-y, compared to a gain of 25% to 39m tonnes expected for 2011, the state research agency Antaike forecasts. The production capacity of alumina in China may rise 11% to 55m tonnes in 2012, from 49.5m tonnes forecast for 2011. This would finally result in higher imports of bauxite in the following years. India’s Nalco has finalized its third 2012 alumina term sell tender, comprising 240,000 tonnes at 16.39% of the three-month LME aluminum price on a fob basis. The Switzerland-based buyer will receive the alumina in batches between January and December this year, Ansuman Das, commercial director at Nalco, told Reuters. Nalco had awarded to Glencore its first 2012 term contract in October comprising 300,000 tonnes at 16.1% of the LME 3-month price. The second contract for 270,000 tonnes went to Standard Bank at 16.2% (source: Platts). In early November Alcoa announced it would sell 40% of its alumina production on spot or index contracts by the end of 2012. Ship owners were divided over what they should consider a reasonable freight rate for February. One put the market at USD2222.50 / t while another one quoted USD23.5024 / t. The first source said there was a recent ALUMINUM · 1-2 / 2012 ECONOMY prompt fixture done at USD18-19 / t; the other valued the prompt market at USD22-22.50 / t, Platts reported. Banks ’expectations Credit Suisse was quite pessimistic in its latest report, forecasting an aluminum price of USD1,750 / t by the end of the first quarter 2012 and USD1,850 / t by the end of the year. The bank stated that “both momentum and trend indicators have turned negative and hint at further weakness ahead as persisting deleveraging pressures and deteriorating technicals may lead the market to undershoot fundamental fair value further”. Another Swiss investment bank, UBS, forecasts an average aluminum price in 2012 at USD2,226 / t and at USD2,535 / t in 2013. “We see an inevitable deceleration of global growth in H1 2012 after the multiple crises of H2 2011; this is likely to put downward and volatile pressure on commodity prices until improved conditions prevail in H2 2012. The oil and energy sectors should continue to lead commodity sentiment, ”the bank stated in its latest report on the global commodities outlook for 2012. Standard Chartered expects the aluminum price to average USD2,100 / t in Q1 2012 and USD2,300 / t in Q4 2012, before it rebounds to USD2,500 / t in Q1 2013. According to this bank, based in London, 2012 promises to be Another volatile year, particularly in the first half as the crisis in Europe will continue. The bank expects equity markets to have a significantly better year than in 2011, after a challenging start, and very strong gains in the second half of the year as quantitative easing gives results. Danske bank in its latest research report said the worrying signs from China persist, and is still looking for a Chinese recovery in 2012. “While we remain cautious in the short to medium term and look for commodity prices to remain under pressure, on the longer -term horizon (6 to 12 months) we continue to see good value in commodities, ”the bank said. It predicted that the aluminum price would average USD2,100 / t in Q1 and USD2,400 / t in H2, with an average over the year of USD2,275 / t. What to expect in 2012? The aluminum price outlook for 2012, especially for the first half, is very bleak and it would not be a surprise to see the price stagnate around or even below the USD2,000 / t limit during the first two quarters. However, there is no consensus among analysts regarding aluminum price performance in 2012, with some leading institutions conflicting in their forecasts, which range between USD1,8002,650 / t. What is certain is that the European debt crisis and tensions in the Persian Gulf will not be resolved any time soon, and the whole of 2012 may be affected if these two developments change for the worse. It would be a rather exhausting play: the Euro zone trying to overcome disintegration and, in parallel, the global economy in the stranglehold of high oil prices. Answers to both questions may be given this year with the start of resolutions. The third major question important for aluminum price performance this year relates to the Chinese economy. Even though it is expected to ease slightly from last year, there is no visible surprise on the horizon. Chinese EXTRUSION - DIECASTING - FOUN DRY - R OL LING - FINI SH ING - MAC HINING - W EL DING - R ECYCLING & +!) & + # '& $! + $ *, "## + #' & INTE ERNAT RNATIONA RNA IONAL IONA L ALUMINIU ALUM INIU NIUM M EXHIBI EXHIBI HIBITION TION ALUMINUM · 1-2 / 2012 INTERN INTERNAT NATIONA IONAL L FOUNDR FO DR RY EQUIPMEN EQUI PMENT PMEN T EXHIBI EXHIBITION TN Organizi Organizi ng gS Secre tari: at ecre ecr tari - Tel. Tel.l +39 39 030 9981 9981045 045 - Fax Fax + +39 030 030 99998105 81055 [email protected] info @metef ef com ef.c com - - [email protected] [email protected] nfo foun o deq . q com c -%! + $) # # $ ''%)! '% + !, (' '% 23 ALUMINIUMSME LT INGINDUSTRY production should satisfy demand this year too, without significant exports or imports of primary aluminum and aluminum products . Imports may be higher in the first half of the year and exports in the second half, making a balance for the year. The global market will remain in surplus, at aro and 1m tonnes, while expected production cuts will be compensated by new capacities entering production in India and the Middle East. The price is expected to oscillate even more frequently than last year but it should not wander far from the USD2,000 / t level in either direction. Only exceptional spikes of the oil price could push it substantially higher temporarily, though for a short period. Author Goran Djukanovic is an aluminum market analyst and a consultant / advisor to the Montenegrin government on aluminum and energy markets. Email: [email protected]