Hulamin Chair Predicts Strong Showing in 2017
04 May 2017 by Staff
South Africa’s aluminium semi fabricator Hulamin expects a significantly stronger showing in the current year according to firm chairman Mafika Mkwanazi.
He spoke at the company’s annual meeting last week, telling investors that a stronger product mix offered by the firm, a greater use of scrap aluminium, efficiency improvements, and strong manufacturing performance are all expected to account for Hulamin’s projected bottom-line improvements.
Additionally, the strong position of South Africa’s currency in relation to the United States dollar over the first few months of the year will play a positive role, but improved global prices for aluminium is expected to slightly offset that advantage.
Rolled products led the way in Hulamin’s momentum so far this year Mkwanazi said, noting a full slate of orders for the remainder of the calendar year for that division. Much of the uptick is on account of a “somewhat stronger” local packaging and engineering market, he explained
“Local sales of can stock, which are usually seasonally lower in the first quarter, increased measurably in March of the current year after an expected slow start,” revealed Mkwanazi. “Our expectation remains for reasonably strong growth in local sales in 2017, underpinned by increasing can stock demand.”
Mkwanazi continued by reminding the audience of antidumping actions filed by the United States against the People’s Republic of China.
“On April 21 2017, the US International Trade Commission made an affirmative preliminary injury determination regarding imports of aluminium foil from China,” he said. “This action should serve to strengthen realised foil prices in the US.”
LME prices have risen since their nadir last year, with the momentum carrying forward to the present, Mkwanazi explained. He said this has drawn many experts to project that the substantially better aluminium market may mark the end of the ten-year down-cycle.
“This prediction is based on declining supply out of Asia on the basis of capacity closures being driven by poor returns and new pollution controls in China that are affecting its aluminium smelting industry,” Mkwanazi elaborated.
As China accounts for the lion’s share of aluminium capacity, such changes are sure to have an effect upon the global supply, explained Mkwanazi. As prices rise, so rise Hulamin’s business prospects he said, as this increased the value of the firm’s unhedged aluminium inventory.