Alteo: Serving the speciality markets

By Davide Ghilotti
Published: Friday, 26 January 2018

As non-metallurgical alumina markets are facing a combination of tight supply, high demand and rising prices, Industrial Minerals caught up with Gildas Fontaine, marketing, business development and communication director at France-based speciality alumina supplier Alteo, to discuss what is in store for calcined alumina and the future prospects of global speciality markets.


Industrial Minerals: Most participants reckon the market is looking ahead to a widespread increase in calcined alumina prices this year. Are you also of this belief?

Gildas Fontaine: Yes, we share this view. We see the calcined alumina market under pressure. What we expect today is very strong demand coming from all markets. The main driver is the refractory industry overall [Alteo sells to bricks and monolithic producers] but also in the feedstock business for tabular alumina, white fused or calcium aluminate cement. We are sold out for all products and all markets.

IM: Do you expect the bullish market forces to extend for some time?

GF: Since the main driver is refractories demand from the steel industry, we don’t know when it may stop. So far, it keeps growing at a fast pace.

We don’t hear of competitors who cannot supply so it means that it’s really down to demand drivers. We know refractories [end markets] can be a bit erratic so we need to be prepared to decrease even if we don’t see any sign of it today.

The technical ceramics market is also one that offers interesting opportunities, particularly after [changes in supply composition]. We are looking in that space.

IM: How is the balance between global supply and global demand in calcined alumina at the moment? 

GF: We are short on production and there is an unbalanced situation between supply and demand. We don’t see any of our competitors in a situation of overcapacity, but we don’t see that many investments to follow the growth curve.There are two consequences to this unbalance: one is to increase prices and the other is to invest in new capacities.

IM: How is Alteo investing at the moment and with what targets?

GF: We started investing in grinding capacity in Asia in 2017 and we are working on further expansions. We are not expanding Bayer capacity in Gardanne [the plant in France], but we are working on high value products. The strategy is to improve Alteo’s offering of finished downstream products.

The additional capacity in grinding and packing will allow to sell the material to higher value applications. This plan is pushing us towards Asia: we are becoming more and more Asia oriented.
This is not only for one market or other, but for all products that are used in refractories and ceramics.

IM: Is the volatility in smelter grade alumina (SGA) prices we saw in 2017 affecting the calcined alumina space? 

GF: Of course it has had an impact in our price discussions. The SGA price has increased dramatically and, to be honest, we did not expect it. The correlation between the SGA price and the speciality alumina cost is important, as most of the speciality alumina producers use SGA feedstocks.

IM: What do you expect the price increase will be for calcined aluminas this year?

GF: [I expect] a ballpark range of 15-20%, depending on specific customer. It’s even higher than 20% in some cases.

IM: Do you expect the market to evolve towards shorter contracts, in response to the price increase? 

GF: Not really. From what we have seen, customers’ main fear is not getting enough material to run their business. We believe their first priority is to get the volumes.

IM: What are the main challenges the industry could face this year? 

GF: I would say the main challenges are insufficient supply which is creating a situation of higher prices. High demand, in some cases, is exceeding available supply and a lack of enough investment [is making the industry less able] to keep up with this increasing demand.

IM: I know of at least three suppliers increasing their hydrate prices. Do you also see the ATH market appreciating?

GF: Yes, it comes down to lack of material available for customers. We see increases worldwide. We are working on our mix of sales, and we want to reduce our sales of standard wet hydrate and focus on calcined alumina for the refractories and ceramics.

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