Platts Conference - more of the same

The Platts aluminium conference is all but over, and after day one it has to be said the message was to expect more of the same.

One of the better papers yesterday was from Macquarie’s Colin Hamilton. Colin gave some excellent meta-analysis - he took the data we all see and went into deeper detail, comparing numbers and putting economic indicators into new paradigms. One example was how he compared manufacturing PMI with Services PMI, and compared countries on a grid. Overall, his message was that demand is not where the problem is. Over-supply remains the big challenge, especially in terms of China.

We also had a paper from Christine Keener from Alcoa. Although she was an entertaining speaker, her numbers were no different to what we see on Alcoa’s quarterly analysts calls. She also made the same mistake many people make - they take the official data as being accurate. She quoted the latest aluminium production numbers from China as showing that there is a significant slowdown in supply, without stopping to check whether the numbers are right. (Hint - they aren’t. We will be briefing our clients on the error in the data in our next World Aluminium Monthly.)

There were several other papers through the day, including on the state of play in Russia and in Mexico, as well as a review of the scrap market. But none of these gave us much in the way of new insights.

Perhaps the most revealing item of business was at the very start of the conference. Karen MacBeth from Platts gave us the results of their annual competition, where attendees have to guess what the metal price and mid-west premium will be in 12 months time. Their 2014 conference must have been very bullish, as most guesses had the metal price up over $2000, and premiums at $0.20 or more. The prize winners had guesses that were still well above where the metal price was at the start of this conference. It will be interesting to see what people put as their guess for January 2017 - and how accurate those guesses will be. Perhaps Platts should plot a chart from each year’s conference and show the % accuracy of the average guess over the years.

Platts certainly did a good job with this year’s conference. The venue was good, and the numbers were high for such a tough market - I was told there were about 350 people attending. It helps for Americans that Platts put the conference somewhere nice - Fort Lauderdale in this case - as it allows those in New York through to Seattle to escape the winter woes for a few days.

My thanks to Platts for inviting me to speak. And thanks to those in the audience to came up to me afterwards with questions or comments.