August 31, 2021 – Indian aluminum producers are running out of energy, according to recent press reports, after Coal India Ltd drastically reduced coal supplies without notice. In China, six other stainless steel producers in Guangxi province are having to cut production. In total, around one million tons of chinese crude steel prodcution are lost in September. Stainless steel futures make significant gains. Base metals continue to show strength on LME and SHFE.

Stainless Espresso: Next crisis? Indian aluminum smelters running out of energy
Stainless Espresso: Next crisis? Indian aluminum smelters running out of energy

Next crisis? Indian aluminum smelters running out of coal

According to press reports, Coal India Ltd (CIL) has drastically cut coal supplies to indian aluminum producers at their captive power plants. Indian aluminum manufacturers say this allegedly happened without warning and has more or less brought aluminum production in India to a standstill.

Without power, aluminum plants face shutdowns lasting several months

Aluminum producers rely on a continuous supply of energy, and even a shutdown of just two hours will cause the molten aluminum in the pots to cool. This causes the aluminum plant to shut down for at least six months, resulting in high losses and restart costs, and once restarted, it takes almost a year to achieve the desired metal purity.

The Aluminium Association of India (AAI) calls for immediate action.

The AAI has called on CIL to immediately resume coal supplies and also train allocations. And to refrain from such actions without prior notice in the future.

Aluminum futures on SHFE and LME continue to rise

Already yesterday, Monday, the aluminum futures on the commodity exchanges have reacted to production cuts in China and the announcements of the U.S. Federal Reserve and had risen significantly. Today, Tuesday, they continue this trend. On the LME, it goes for aluminum by currently 2.32% upwards and on the SHFE by 1.28%.

If a shortage of Indian aluminum for several months is now added to the already tense situation on the international aluminum market, this is likely to further affect the prices of futures, but also those on the spot market.

Stainless steel prices on SHFE rise: Strong raw material prices and output curbs

Stainless steel futures prices on SHFE continued their upward trend today. And have currently increased by more than 3.8%. The background to this is the sharp rise in nickel prices, but also continuing concerns about the supply situation for stainless steel.

Nickel prices up again

The nickel on SHFE and LME has again increased significantly compared to yesterday. On the SHFE it went up by more than 3.4%, on the LME currently by more than 3.5%. Nickel pig iron shortages and production cuts are driving prices.

Guangxi: Six stainless steel producers have to reduce production

Local authorities in China’s Guangxi province have ordered six stainless steel producers to cut production by a further 20% to 30% in a bid to reduce energy consumption and environmental impact. It is expected that the affected Chinese steelmakers will output about 1,000,000 tons less crude steel in September.


Base Metals still on the upswing

After Monday’s moderate Fed announcement, Base Metals continue to hold up well today. Lead and Zinc fall slightly on the SHFE, but Copper, Aluminum, Nickel and Tin continue to rise. The values on the LME behave similarly to the SHFE.

And what moves you today?

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