According to foreign news on January 16, the World Bureau of Metal Statistics (WBMS) released a report on Wednesday showing that:

Copper:

From January to November 2018, the global copper market had an excess supply of 54,000 tons, and in 2017, 120,200 tons.

Global copper stocks fell by 165,000 tons in November from December 2017, of which LME copper stocks decreased by 2,500 tons.

From January to November 2018, global copper production in mines was 18.94 million tons, an increase of 2.6% over the same period last year.

From January to November 2018, the global refined copper output was 21.15 million tons, an increase of 1.0% over the same period last year. Among them, copper production in Zambia and Chile increased by 9,700 tons and 4,500 tons respectively.

Global copper consumption in January-November was 21.45 million tons, higher than that in the same period of last year, which was 21.26 million tons.

China’s apparent copper consumption from January to November 2018 was 11.311 million tons, an increase of 6.5% over the same period last year.

Copper production in the 28 EU countries fell by 1.4% year on year, while copper demand increased by 0.2% to 3.08 million tons over the same period.

In November 2018, the global output of refined copper was 1.988 million tons, while the consumption was 1.974 million tons.

Aluminum:

From January to October 2018, the global supply shortage of raw aluminium was 561,600 tons. In 2017, there was a shortage of 1.21 million tons in the raw material market.

China’s demand for raw aluminium in January-November was 54.918 million tons, an increase of 6,000 tons over the same period last year.

Primary aluminium production increased by 675,000 tons from January to November 2018.

No more producer inventory data will be released in the future. Total inventory will be reduced by 104,000 tons in November, which is 102,000 tons less than December 2017.

LME primary aluminium stocks increased significantly in November this year as Malaysian stocks increased, while stocks of other registered warehouses in Asia decreased.

By the end of November, LME’s inventory of aluminium was 2.244 million tons, compared with 2.346 million tons by the end of 2017.

By the end of November 2018, the total inventory of the four major exchanges, London, Shanghai, the United States and Tokyo, was 1.786 million tons, down 157 million tons from the end of December 2017.

Global primary aluminium production increased by 1.3% from January to November 2018. China’s primary aluminium production is estimated to be 314.48 million tons, accounting for 58% of the world’s total production.

China’s apparent demand for primary aluminium increased by 6.6% from January to November 2018.

From January to November 2018, China exported 341,000 tons of unwrought aluminium, higher than 335,000 tons in the same period last year.

China’s net exports of semi-finished aluminium products in the first 11 months of this year were 4.252 million tons, up from 3.486 million tons in the same period last year.

The output of raw aluminium in the 28 EU countries decreased by 0.2% compared with the same period last year, while that in the North American Free Trade Area (NAFTA) fell by 3.8%.

Demand for raw aluminium in the 28 EU countries increased by 147,000 tons compared with the same period in 2017.

Global demand for primary aluminium was almost flat from January to November 2018.

In November 2018, global primary aluminium production was 4989,000 tons, while consumption was 501,999,000 tons in the same period.

Lead:

From January to November 2018, there was a shortage of 203,000 tons in the global lead market and 386,000 tons in the whole year of 2017.

Total inventory at the end of November was 67,000 tons lower than at the end of 2017.

From January to November 2018, the global production of refined lead (primary lead and recycled lead) was 10.053 million tons, an increase of 2.5% over the same period in 2017.

From January to November, China’s apparent demand was 4.541 million tons, an increase of 168,000 tons over the same period last year, equivalent to more than 42% of global demand.

Apparent demand in the United States from January to November decreased by 23,000 tons compared with the same period in 2017.

In November 2018, global refined lead production was 1019,100 tons and consumption was 106,191,000 tons.

Zinc:

From January to November 2018, there was an oversupply of 65,100 tons in the global zinc market, and a shortage of 438,000 tons in 2017.

From January to November, we reported a decrease of 146,000 tons compared with the same period last year, and a net decrease of 338,000 tons in Shanghai.

LME zinc stocks increased earlier this year, but fell by 31.6 million tons in November to 112.6 million tons, compared with 181,000 tons at the end of last year. LME zinc stocks account for 22% of global zinc stocks, most of which are registered warehouses in the United States.

From January to November 2018, global refined zinc production decreased by 2.6% and consumption decreased by 6.1%. Over the same period, Japan’s apparent consumption was 483,800 tons, an increase of 9.8% from January to November 2017.

Global demand for refined zinc decreased by 795,000 tons from January to November 2017. China’s apparent demand is 5.576 million tons, accounting for 46% of global demand.

In November 2018, the global output of flat zinc ingots was 1.172 million tons, and the consumption was 124.75 million tons.

Nickel:

From January to November 2018, there was a shortage of 0.65 million tons in the global nickel market. In 2017, there was a shortage of 413,000 tons.

By the end of November 2018, LME could report a reduction of 154,000 tons in nickel stocks from the end of 2017.

From January to November 2018, the global production of refined nickel was 2.279 million tons, and the demand was 2.085 million tons.

The global nickel production from January to November 2018 was 2.169 million tons, an increase of 289 million tons over the same period in 2017.

The nickel output of China’s smelters/refineries increased by 136,000 tons compared with the same period in 2017, and the apparent demand increased by 127,000 tons compared with the same period in 2017.

Apparent global demand increased by 168,000 tons over the same period last year.

In November 2018, the global production of nickel in smelters/refineries was 214,400 tons and consumption was 215,500 tons.

Tin:

From January to November 2018, there was a shortage of 134,000 tons in the world tin market.

Reportable inventory increased by 1500 tons compared with the end of 2017.

Global refined tin production decreased by 2,900 tons from January to November 2018 compared with the same period in 2017. Among them, Asia’s output decreased by 1,900 tons compared with the same period last year. China’s apparent demand decreased by 9.3% over the same period last year.

In January-November 2018, global tin demand was 345,000 tons, down 1.7% from the same period last year. Japan’s consumption is 259,000 tons, 700 tons less than in January-October 2017.

In November 2018, the global output of refined tin was 304,000 tons and consumption was 32,500 tons.

According to the report of Japan Economic News on January 15, it is estimated that the U.S. crude oil production in 2018 leaped to the top in the world after 45 years. Driven by shale oil, U.S. crude oil production has more than doubled in 10 years, while dependence on imports has fallen to its lowest level in 30 years. The United States had previously relied on the Middle East in terms of crude oil supply, but as its production increased, its active participation in Middle East affairs might also decline. On the contrary, the “U.S. priority” foreign and security policies would be strengthened. The transformation of the United States into a net exporter of crude oil that exports more than imports is also imminent, and the world’s energy geopolitics may change.

Estimates from the U.S. Energy Information Agency (EIA) and industry show that crude oil production in the United States averaged about 10.9 million barrels a day in 2018, an increase of about 20% over the previous year. The United States ranked third in 2017, but Saudi Arabia, which surpassed second in September 2018, and Russia, which ranked first, changed their power structure completely. Shale oil is still profitable below $50 a barrel because of the lower cost of technological innovation.

The structure of the U.S. dependence on foreign oil is changing as production increases. Net imports minus exports of crude oil account for less than 30% of U.S. domestic consumption in 2018, which is likely to reach the lowest level since 1988. This proportion hovered between 4 and 50% after the mid-1990s, when demand expanded significantly.

On the one hand, U.S. imports from the Organization of Petroleum Exporting Countries (OPEC) fell to about 50% of its recent peak (2008), the lowest level in 31 years. “The importance of the Middle East has declined and will no longer interfere in Middle East affairs at any cost,” said Takeshi Ueno, a senior economist at Japan’s Hiroshi Foundation Research Institute.

One of the reasons why the United States has long played the role of “world police” is to ensure a stable supply of energy. The fourth Middle East War in 1973, when the decline in domestic oil resources became evident, led to the oil crisis, which struck the world economy as prices rose rapidly.

To this end, in the Middle East, which is heavily dependent on crude oil, the United States led actions to maintain regional order, such as the 1991 Gulf War. But in December 2018, the United States announced its withdrawal from Syria, where the civil war is still ongoing. From the point of view of energy security, the active participation of the United States in Middle East affairs has significantly weakened.

On the other hand, the United States banned crude oil exports because of lessons learned from the oil crisis, but lifted the ban in 2015. After that, the export of crude oil expanded rapidly. By the last week of November 2018, its exports expanded to the fourth largest in the world after Saudi Arabia and Russia.

There are many opinions in the market that the sense of existence in the United States will be a factor to pull down the market. Lotte Securities commodity analyst Jeshi Yoshida said, “OPEC’s”magic power”of raising prices through production cuts will be weakened”.

The world crude oil market is hovering around $50 a barrel. If the United States maintains its output growth at a faster than expected rate, it will restrain the rise in oil prices (Takashi Noguchi, chief economist of Japan’s Petroleum, Natural Gas and Metal Mineral Resources Agency), which may shake the ruling foundations of Russia and the Middle East, which are financially dependent on crude oil revenues.

U.S. exports of crude oil and petroleum products exceeded imports once a week in November 2018, and net exports for the first time since 1991, which can be traced back to the same standards. Shale oil production fluctuates due to the financing environment, but Daniel Eugene, a well-known analyst, predicts that by the early 1920s, [the United States] will also become a net exporter throughout the year.

Trump’s political power struggles to gain new hegemony by taking the world’s energy supply as its source. U.S. crude oil import and export revenue and expenditure in 2017 was negative 110 billion U.S. dollars. It accounts for 14% of the overall trade deficit in goods. The United States is considering reducing the trade deficit by expanding energy exports. The United States has become a net exporter of natural gas in 2017. The United States has begun to move from a big energy consumer to a big exporter, or will bring about changes in the world political structure based on resources.

According to LME data, on January 14, 2019, the total stock of copper metal was 133,700 tonnes; the total stock of aluminum metal was 1,294,050 tonnes, an increase of 9,325 tonnes per day; and the total stock of aluminum alloy was 10,400 tonnes.

Australia’s LNG exports grew 23% in 2018, bringing total exports to a record 69.5 million tons and export revenue to a 68% increase of about A$43.3 billion, according to data released recently by the Australian Energy Consulting Company Energy Survey. According to the report, with the completion and commissioning of large-scale liquefied natural gas projects in Northwest Australia, Australia’s liquefied natural gas exports will continue to grow strongly in 2019.

LNG is one of Australia’s main export earning commodities, second only to coal and iron ore. At present, Australia has surpassed Qatar as the world’s largest exporter of liquefied natural gas and China’s largest supplier of liquefied natural gas. As of November 2018, 46% of China’s LNG imports came from Australia. The huge energy demand in the Chinese market stimulated Australia to expand LNG investment and export.

Australia has a huge potential for natural gas development. In recent years, the development of liquefied natural gas (LNG) has been booming. Domestic and foreign investment has exceeded 200 billion US dollars. At the end of 2018, two LNG projects in Darwin will cost US$45 billion to put into operation, and their production will increase dramatically in the next two years. Eastern Australia’s gas-producing areas are affected by domestic energy supply constraints, and production is far below capacity, so export growth is not significant.

With the deepening of China’s supply-side reform of electrolytic aluminium and the remarkable increase of alumina production capacity abroad, the era of high-profit alumina industry is expected to end without emerging countries replacing the decline in aluminium demand caused by China’s economic slowdown.

With the production process of alumina unchanged for decades, only the comprehensive utilization of red mud, known as a worldwide problem, is expected to carry the banner of the next profit outlet.

A Brief Introduction to Red Mud

Each ton of alumina produced about 1.5 tons of red mud, particle diameter 0.088-0.25 mm, specific gravity 2.7-2.9, bulk density 0.8-1.0, melting point 1200-1250 C. The composition of red mud is shown in the table below.

At present, Bayer process is widely used in the production of alumina in China. The red mud of Bayer process is characterized by high content of iron, aluminium and alkali.

Typical Cases of Red Mud Comprehensive Utilization in Alumina Enterprises

1. China Aluminum Shandong Branch: The available data are that the comprehensive utilization rate of red mud is 25% by 2016, and the total consumption of red mud is 12 million, which is the highest utilization rate of alumina enterprises in China at present. Henan Province Aluminum Industry Transition Development Action Plan (2018-2020) clearly put forward that the comprehensive utilization rate of red mud will reach 10% by 2020. There will be no harm if there is no contrast. The comprehensive utilization rate of red mud in China is too low. The main uses of red mud are to prepare new desulfurizer technology for coal combustion, high grade cement, highway roadbed, brick making and water purifying agent.

2. Weiqiao Group: In 2018, 20,000 tons of red mud were used on the 5.3 km Subgrade of Binzhou section of Jiqing Expressway. It is estimated that 200,000 red mud can be consumed per kilometer of highway, 60,000 tons of red mud can be consumed on Provincial Highway and 20,000 tons of red mud can be consumed on Municipal road. For countries with huge mileage of highway in China, the future market prospects are broad.

3. Typical Cases of Comprehensive Utilization of Red Mud by Social Forces

On December 31, 2018, Shandong Satellite Television broadcasted a news about the large-scale production of permeable bricks (70,000 tons of red mud per year) by Zibo Tianzhirun Ecological Technology Co., Ltd. The company’s red mud permeable brick project red mud blending rate as high as 90%, successfully selected in 2018 Shandong Province, ten innovative achievements of circular economy. The owner of the company invested more than 30 million yuan and finally gambled on the only two houses. Fortunately, the company succeeded. It is a worldwide problem to know.

It is not only reminiscent that Inner Mongolia enterprises have spent tens of billions of dollars to break through the difficulty of producing alumina from fly ash, but there has been no breakthrough so far.

IV. Suggestions on Comprehensive Utilization of Red Mud

At present, red mud is used to produce cement, roadbed and permeable bricks, each of which has its own advantages and disadvantages. The production technology of cement is mature, but there are cement factories nearby and the consumption of roadbed is large. However, the future demand for highways in economically developed areas is limited. The production of permeable bricks can be popularized throughout the country. The disadvantage is that the sales radius is less than 800 kilometers.

Generally speaking, the comprehensive utilization rate of red mud in China is very low. Although the utilization rate of red mud in China is not worse than that in other countries, we can not compare with foreign countries in the future. The era of self-surpassing in China’s alumina industry has arrived. We have seized the profit outlet of red mud comprehensive utilization and will reshape the status of enterprises in the alumina industry.