Expense of Making Aluminum

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Slide 1

Cost of Making Aluminum Feb 12, 2007

Slide 2

Alumina cost In 2006, the normal cost was $515/ton http://fxtrade.oanda.com/assets/ubsnews/newscontent/131625.shtml 2006 USGS PDF: Events, Trends, and Issues: Increased request and restricted supply brought about spot costs for metallurgical-review alumina, as distributed by Metal Bulletin, to rise drastically before the end of the second from last quarter. The distributed value extend started the year at $390 to $420 per ton of alumina. By the center of March, the cost extend had expanded to $440 to $460 per ton. The cost extend then started a descending slide that kept going through early August to a scope of $400 to $420 per ton, before bouncing back to $470 to $500 per ton toward the end of September

Slide 3

Alumina Cost con'd 2007 USGS PDF: Events, Trends, and Issues: Increased supply brought about spot costs for metallurgical-review alumina, as distributed by Metal Bulletin, to diminish significantly before the end of the second from last quarter. The distributed value extend started the year at $580 to $590 per ton of alumina. Before the end of April, the value run had topped at $620 to $635 per ton. The value run then started a sensational descending slide that kept going through mid-October to a scope of $240 to $290 per ton.

Slide 4

Need two tons of Alumina For a huge amount of Al Thus $1030 for the Alumina

Slide 5

Cost of Electricity In the most recent 50 years, the normal measure of power expected to make a pound of aluminum has been cut from 12 kilowatt hours to around 7 kilowatt hours. http://www.aluminum.org/template.cfm?Section=The_Industry 2004

Slide 6

Using 7 kwh per pound of Al A metric ton is 1000 kg which is around 22000 pounds—subsequently 7 * 22000 = 15400 kwh If 1 kwh costs $0.06, then this is $924/ton Plus the cost of alumina = $1934 excluding transportation and different expenses

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http://www.lme.co.uk/aluminium.asp LME Official Prices (US$/ton) for 13 Feb 2007 LME Official Opening Stock (in tons) Aluminum  CASH BUYER   2,828.00    CASH SELLER &  SETTLEMENT    2,830.00    3-MONTHS BUYER   2,759.00    3-MONTHS SELLER   2,759.50    15-MONTHS BUYER   2,567.00    15-MONTHS SELLER   2,572.00    27-MONTHS BUYER   2,397.00    27-MONTHS SELLER   2,402.00  

Slide 8

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