The world’s second-largest non-Chinese aluminium producer, Rusal, began new production operations last week at its Boguchansk aluminium smelter in Siberia. This added output essentially doubles the plant’s capacity to 298,000mt tonnes; the company is even considering adding more capacity, already, according to CEO Evgenii Nikitin. Rusal has been busy resuming output and shipments since the end of last year when sanctions imposed by the United States were lifted after nine months of negotiations that ended in founder Oleg Deripaska giving up his control of the company. While the company lost contracts in the sanctions period, it says it is busy winning supply contracts back for 2020 and expects to “restore lost positions” in its traditional markets, particularly in Asia and America. Shipments in Europe seem to have been less disturbed, but the new output activity and lifting of sanctions are likely to see increased aluminium shipments along European waterways as well. Rusal is also busy building a new smelter in Taishet set to launch late next year. The company expects worldwide aluminium demand to grow 3.7% this year to 68 Mt and keep growing at the same rate in 2020.
Global grain stocks are likely to see further declines in the 2019-2020 season, according to the International Grains Council, which expected gains in wheat and corn output unlikely to offset projections of record demand. Having issued its first full report for supply and demand for this season, IGC is predicting total grain inventories will fall by 29 Mt in the season to 575 Mt after declining by 44 Mt in the previous 2018-2019 season. Total output in the current season is now forecast by IGC to rise by 50 Mt to 2.175 billion tonnes while worldwide grain consumption is expected to reach a record level of 2.204 billion tonnes. The council sees global maize output in the current season increasing by 10 Mt to 1.124 billion tonnes due to higher production in the US, China and Brazil, offset to some degree by expected declines in the EU and Ukraine.
Futures prices for wheat have been declining around the world, but have been most stable in the Europe than in the US. Paris-based benchmarks for May milling wheat fell by 0.1% at the beginning of the week to EUR 185.75/mt, staying just above the previous week’s low of EUR 185/mt. The contract is down by 1.2% month-on-month. Falling Paris wheat was triggered by sharper declines in Chicago-based wheat futures as higher-than-forecast plantings of US maize put pressure on futures for US grain as a whole. The European Commission recently increased its monthly forecast for 2018-19 EU common wheat exports by 1 Mt to 19 Mt, which is nonetheless below the previous season’s level. EC simultaneously lowered its forecast for the next season’s (2019-2020) EU common wheat crop to 140.2 Mt from a prior forecast of 140.8 Mt.
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