Brazilian ATH exports to US rise almost 150%

By Davide Ghilotti
Published: Friday, 12 May 2017

The surge in Brazilian deliveries of alumina trihydrate to US customers that characterised the second half of 2016 has continued this year to date.

Brazilian exports of alumina trihydrate (ATH) to the US increased almost 150% in the early months of 2017 against year-ago levels, confirming the surge in US demand from the Latin American producer that was first seen after the closure of domestic producers.

The US overtook Japan as the top export destination for Brazilian ATH, importing a total 131,436 tonnes of material between January and April – an increase of 146% year-on-year (y-o-y), according to Brazil’s customs data.

The increase in shipments to the North American market in early 2017 confirms the uptrend that was first reported by IM during 2016, when exports rose over 200%.

January-April exports recorded a turnover of $19.7m – an increase of more than two-fold on the same period in 2016 ($8.4m).

Domestic US supply was affected by last year’s closure of two major alumina refineries, Alcoa Inc.’s Point Comfort plant and Sherwin Alumina Co.’s plant, both in Texas.

Brazilian exporters saw the gap in the market that the closures would create and sought to increase their presence in the destination as a result.

Sources active in ATH had told IM that Brazil had been "seeking to up its market share of US ATH supply after Alcoa and Sherwin closed, and has been very focused on this".

Delegates attending the IM Bauxite & Alumina conference in March this year said that "everyone" was expecting an increase in ATH prices following the closure of the facilities. The two sites had a combined total capacity of 3.9m tonnes alumina products, although had been running lower throughputs for some time before finally closing.

However, ATH prices remained stable on their existing levels. According to market participants, this was down to a combination of weak demand from the downstream market, high leftover stocks following the closures, and a surge in supply from Brazil that avoided a potential shortage of material available.

What did take place was a change in the composition of total US ATH supply, with Brazil increasing its total share of the market, while upholding prices.

Japan and other markets

Japan, the now second-largest importer of Brazilian ATH, saw its imports in January-April reduced to 115,897 tonnes (-25%). This led to a 31% decrease in exports value, to $16.8m.

Meanwhile, Brazil increased its shipments to a number of destinations in Latin America, including Mexico (10,888 tonnes), Argentina (6,408 tonnes), Colombia (2,511 tonnes), Uruguay, Chile, Peru and Paraguay.

In Asia, exports to South Korea fell in the four-month period (-9%, 1,900 tonnes) but those to China rose 81% to 2,310 tonnes. This may be related to ATH production issues within China, on the back of the widespread environmental controls currently affecting a number of industries across the country.

A European buyer of ATH told IM this week that Chinese production has been hit by the shutdowns, and that domestic ATH prices were on the up as a result.

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