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☆ Column: South Korea's Gwangyang is the new LME aluminium battleground
▼ + stars: | 2023-08-29 | by ( Andy Home | Thomson Reuters | Senior Metals Columnist Who Previously Covered Industrial Metals Markets For Metals Week | ) www.reuters.com time to read: +6 min

LONDON, Aug 29 (Reuters) - The South Korean port of Gwangyang has emerged as the new hub for storing London Metal Exchange (LME) aluminium. Another 54,000 metric tons of aluminium have arrived in the intervening week, promising more turns of the storage carousel. LME aluminium stocks at Gwangyang and Port KlangGWANGYANG GRABS THE SPOTLIGHTA total 198,125 metric tons of aluminium were warranted at LME warehouses in Gwangyang in the first quarter of this year, most of it arriving in four single-day clips. Gwangyang LME aluminium stocks, arrivals and drawdownsRUSSIAN METAL NOW DOMINATESThe competition to store LME aluminium during periods of weak demand is not new. The Gwangyang aluminium storage wars may just be starting.

Persons: Gwangyang, ISTIM, Henry Bath, Sharon Singleton Organizations: London Metal Exchange, Glencore, ISTIM, Pac Global Services, Reuters, Thomson Locations: Gwangyang, Malaysia's Port Klang, Port, Rotterdam, Busan, South Korea, Port Klang, Malaysian, Detroit, Vlissingen, ISTIM

The great destock has resulted in a significantly slimmed-down LME warehouse network. The number of exchange-registered warehouse units has fallen by 151 over the last two years. LME storage space at the latter has grown by 35,000 square metres to 249,000 since the end of September last year. LME warehouse operator Istim has been expanding its presence, listing 24 units over the last year. But it's decidedly good news for LME warehouse operators.

Persons: Goldman Sachs, It's, Kloosterboer, Istim, Jane Merriman Organizations: London, Halley Metals, Pac Global Services, Infinity Logistics, HK, Rotterdam, Reuters, Thomson Locations: Krasnoyarsk, Siberian, Detroit, COVID, Ukraine, Spain, Antwerp, Vlissingen, Rotterdam, KOREA, Singapore, Malaysia's Port Klang, Busan, Incheon, Gwangyang, LME, Port Klang, China, United States, Europe

Norwegian producer Norsk Hydro (NHY.OL) has called for the exchange to reconsider its decision last November to continue accepting deliveries of Russian metal. China imported 462,000 metric tons of Russian-brand primary aluminium last year, up from 291,000 metric tons in 2021. The country has emerged as the market of first resort for Russian metal since the invasion of Ukraine in February 2022. The top two destinations for June's "exports" were Japan (10,000 metric tons) and South Korea (20,500 metric tons). China's aluminium run-rate fell by an annualised 636,000 metric tons over the first quarter, according to the International Aluminium Institute.

Persons: Rusal, Goldman Sachs, ingot, isn't, Jane Merriman Organizations: London Metal Exchange, Norsk Hydro, Hydro, Rusal, International Aluminium Institute, AZ Global, Reuters, Thomson Locations: Norwegian, Russian, China, United States, Europe, Asia, Ukraine, Japan, South Korea, Gwangyang, CHINA, Yunnan

Aluminium will be hardest hit with penal tariffs of 200% on imports of Russian metal, effective March 10, and imports of any third-country product containing Russian metal, effective April 10. This sort of "super contango" is the market's cry for financiers to pick up spare metal, particularly Russian metal. The Gwangyang deliveries are reported to be Russian aluminium being delivered by Glencore (GLEN.L), which has a long-term off-take deal with Rusal. The cash-to-threes time-spread will be a litmus test of financing appetite for Russian aluminium over the coming period. The only get-out for supplier nations is if they too impose minimum 200% tariffs on their own Russian aluminium imports.

Western policy-makers are still mindful of the supply-chain chaos caused by U.S. sanctions on Russian aluminium giant Rusal and its owner Oleg Deripaska in 2018. A unilateral move to shut out Russian aluminium will accelerate the splintering of what was once a highly globalised market-place. Excess Chinese product in the Asian region is now being supplemented by excess Russian primary aluminium as many Western users choose to self-sanction and not buy Russian metal. Were the United States to impose high tariffs on Russian metal, the LME need only suspend delivery to U.S. locations, a precedent set with the United Kingdom's post-war tariffs on Russian nickel. The LME decided in November not preemptively to ban Russian metal deliveries ahead of formal government action against Russian producers.

☆ Australian battery metal players key to South Korea's EV ambition
▼ + stars: | 2022-11-30 | by ( ) www.reuters.com time to read: +2 min

SYDNEY, Nov 30 (Reuters) - Australia will play a big role in South Korea's ambition to lead the electric vehicle batteries market and diversify from China for its battery metals needs, a top South Korean executive said on Wednesday. In recent years, U.S. allies have moved to reduce their dependence on China amid heightened concern about Beijing's control over the critical minerals sector. South Korea needs critical mineral supplies, having pledged to become a battery manufacturing powerhouse by 2030 as part of a plan to be carbon-neutral by 2050. POSCO last year entered into a joint venture deal with Pilbara Minerals Ltd (PLS.AX) to build a 43,000 tonne lithium hydroxide chemical facility in Gwangyang, South Korea. The Australian government should offer similar incentives so the country can be a leader in global hydrogen exports, he said.

Aluminium ingots are seen outside a warehouse that stores London Metal Exchange stocks in Port Klang Free Zone, outside Kuala Lumpur, March 23, 2015. Another source with direct knowledge said that the aluminium delivered to Gwangyang was produced by Rusal. The sources did not say how much of Rusal's aluminium had been delivered by Glencore to LME warehouses in Gwangyang. Glencore and the London Metal Exchange declined to comment. Stocks of aluminium in LME warehouses jumped 65,825 tonnes to 433,025 tonnes on Friday.

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