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Albras has been discussing a reduction of its primary aluminium exports to Japan in order to offer the metal on the Brazilian market, as production elsewhere in the country continues to fall, Metal Bulletin understands.
While no decision has been taken yet, two sources familiar with the matter said the company, 51% owned by Norsk Hydro and 49% by the Japanese consortium Nippon Amazon Aluminium Corp (NAAC), is considering the option.
At present, NAAC’s share of production – around 18,000 tonnes per month – is exported to Japan.
“There are negotiations to leave part of this metal in Brazil, but so far nothing has been decided,” one source told Metal Bulletin.
“From a strategic point of view, it is worth Albras considering the domestic market,” a second source said.
Hydro has been increasing its sales in the domestic market since it acquired Vale’s share in Albras in 2011.
Albras told Metal Bulletin that Hydro expects to sell a total of 140,000 tonnes of primary aluminium in the domestic market in 2014, up from 87,000 tonnes a year earlier.
The company did not comment on whether it plans to reduce exports to Japan, but said that “NAAC’s share of metal continues to be used in Japan”.
For 30 years, material has been shipped from Albras to Japan as part of a co-operation agreement between the Brazilian and Japanese governments.
But the dramatic change in Brazil’s aluminium sector in recent years has led its shareholders to reconsider that arrangement, Metal Bulletin understands.
Major Brazilian producers, excluding Albras, have been cutting their output since 2013 on soaring costs and depressed international prices, leaving a gap that has been filled by higher imports.
“Even with the slowdown in demand, Albras would surely find customers for its metal in the domestic market now,” a source said.
Albras said in 2012 it would be interested in selling more of its aluminium on the domestic market, which could mean reducing exports to Japan. But it had not been able to convince the Japanese government and other stakeholders.
Danielle Assalve danielle.assalve@metalbulletin.com Twitter: dassalve_mb