Market impact of Sherwin closure and Alpart restart

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02 August 2016

Market impact of Sherwin closure and Alpart restart

Report summary

Sherwin Alumina filed for Chapter 11 bankruptcy protection in January this year and planned to continue operating its plant during the financial restructuring. Just 10 days before bankrupt Sherwin issued a WARN act notice that alerted employees to the possibility of closure by September, UC Rusal announced the sale of its 1.65Mt/a Alpart refinery in Jamaica to China’s JISCO.  The expected restart of Alpart suggests excess ROW alumina supply and lower prices, posing added risks to Sherwin’s already difficult survival path. Should Sherwin close in September and Alpart begin its ramp-up in Q2 2017, the SGA market would be solidly in deficit of about 554kt in Q4. The Sherwin output loss could be replaced tonne-for-tonne by a restarted Alpart operation. However, a two-year supply gap is likely, thanks to the timing between the two events and risk factors associated with any planned restart.

Table of contents

  • Executive summary
    • Recent history of falling SGA demand and capacity creation
      • ROW smelter curtailments 2014-2016 (kt)
    • Key 2016 developments
    • Conclusion

Tables and charts

This report includes 5 images and tables including:

  • China’s SGA requirement, production and deficit 2000-2016
  • Spot alumina prices, (fob US$/t)
  • Global C1 alumina cash cost curve 2016
  • Rest of World alumina balances, China imports and spot prices, 2015-2018, (kt)
  • Market impact of Sherwin closure and Alpart restart: Table 1

What's included

This report contains:

  • Document

    Market impact of Sherwin closure and Alpart restart

    PDF 323.31 KB

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