In case you can’t get enough of what we have to say, you can also follow us on Linkedin. I am not quite sure of the value of Linkedin yet, but it seems to be something that people get into.

There are several groups you can join in Linkedin, and one which I am in has had a discussion thread on the lack of correlation between metal and raw materials. Here’s what I posted to that discussion.

This discussion appears to be short on facts. On the CPC side, the previous comments about China’s position exhibit a complete lack of knowledge of the CPC market. Oxbow in the USA produces about 2 million tonnes per year. Rain CII in the USA and India produces about the same. BP in the USA produces about 1.4 million, from memory.

Surun/ZCGG, the largest producer in China, produces about 1 million tonnes, and that’s because they just finished a major expansion that almost doubled their capacity. Then there are a handful of “export quality” producers in China, but all together, China only exports about 1 million tonnes. India has three major calcining companies, while Alba in Bahrain offers about 400kt-500kt, from memory. Kuwait also produces some CPC. Oh, and don’t forget the European producers.

There are a large number of merchant anode producers in China. The largest is Sunstone, with companies such as Jining Carbon and the former Great Wall Carbon in there as well. Altogether, China exports about 1 million tonnes per year. Egypt has a merchant anode plant, and then there is Aluchemie in Holland, that is part-owned by RTA and Hydro.

The break in the vertical linkage is not as strong as made out. As Paul Williams said, some companies are long on alumina, but for decades now, smelters have been built on a less than complete vertical chain basis. And there are no aluminium companies that I can think of that are long on carbon. They may have carbon plants, calciners etc, but none of them own the means of supply of coke, namely an oil refinery with coker.

It’s no wonder that companies such as Mubadala and Oman Oil Company, who both own smelters in the Middle East, are investing in supply of carbon from China.

China’s traditional model was for smelters to be supported by a common carbon plant. Especially in Henan province, the traditional home of China primary aluminium, smelters were typically too small to warrant a carbon plant, so one anode plant might supply 4 or 5 smelters. Nowadays, the model is shifting as China moves into mega-smelters. In Xinjiang province, the new home of China aluminium, smelters exceeding 1.5-2 million tonnes in capacity are all planning to have their own anode plants.

But although many of them own the means of supply of electricity - power stations - few of them own the means of supply of alumina - Xinfa, Chalco, Weiqiao and one or two others are the exception. And still, none of them own the means of supply of carbon.