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According to Baranov, Hydro is not worried about a premium. But the company believes that the market won’t absorb any more products from companies that don’t use renewable energy.
“Those who don’t do it won’t be in the market”, he said. “But currently, Hydro is not focused on a premium. We can participate in the discussion, but we don’t have a big influence”, he said.
According to Baranov, many public policies regarding low-carbon aluminium are being discussed in different regions of the world, with some areas being more developed, such as Europe and Asia. “Brazil is still at the stage of initial discussions,” he said.
Carlos Neves, vice president of operations at Hydro Bauxite and Alumina, had also previously said in an interview with Fastmarkets on January 7, that markets will be required to pay a premium for low-carbon alumina soon because of producer Alunorte’s developments in terms of decarbonization and sustainability.
Fastmarkets already prices low-carbon aluminium differentials, launching its first European low-carbon aluminium differentials for P1020A and value-added products in March 2021. This was because of growing demand for transparency in this evolving sector.
Fastmarkets’ monthly aluminium low-carbon differential, P1020A, Europe, was most recently assessed at $0-20 per tonne on October 3, stable since April 4.
The aluminium low-carbon differential P1020A, US Midwest, was assessed at 0 cents per lb on October 3. The premium has been at that value since it was launched in November 2023.
Most recently, Fastmarkets also launched a low-carbon aluminium reference for Mexico.
The monthly aluminium low-carbon differential P1020A, cif Mexico, was assessed at $0 per tonne on October 28, down from $0-38 per tonne this time in September.
Norsk Hydro has replaced fuel oil use with natural gas at its Alunorte plant in Brazil. And consequently reduced its carbon emissions by 700,000 tonnes in one year. On January 6, the company announced that two new electric boilers had been installed at Alunorte. Since 2024, Alunorte has also been using solar panels.
“The transition to natural gas and electric boilers at Alunorte has both strengthened our position with existing partners and opened conversations with new ones who are actively seeking low-carbon alumina and aluminium solutions,” the company said.
Baranov said that the US tariffs imposed by President Donald Trump do not presently affect Brazil a great deal. Currently, Brazil is subject to Section 232 50% tariffs on steel and aluminium.
“As Hydro, what worries us [regarding the tariffs] is only if Brazil enters the fight with reciprocity, because we [indirectly] buy imported natural gas from the US. But I hope diplomacy will be kept up”, he said.
Baranov is also member of the Brazilian Aluminium Association (ABAL). “I think it might impact some players that import supplies for aluminium production. But ABAL is putting effort into protecting the market”, he said.
According to Baranov, Brazil should again be an exporter of aluminium.
“We were exporters, and now we are importers. So, this should change. A lot of companies closed their plants and can’t come back. But it’s also a lack of public actions. We are working with ABAL regarding this topic – we have to be prepared and also to protect what we have now and support the growth of the market”.
Luciano Alves, chief executive officer of aluminium producer Companhia Brasileira de Alumínio (CBA), also told Fastmarkets in an exclusive interview on Tuesday October 28 that Brazil’s potential for producing aluminium has not been fully explored and that the country should not only focus on the domestic market but also start exporting.
For Baranov, today Brazil is self-sufficient in aluminium production. “We are the most vertically integrated mining chain in the country”, he said.
In August, Fastmarkets launched a domestic aluminium billet premium pricing reference for Brazil. This was a key advancement because the country’s aluminium market gained greater independence and prominence in the global supply chain.
Fastmarkets’ fortnightly assessment for the aluminium 6063 & 6060 extrusion billet premium, ddp São Paulo was $520-570 per tonne on October 21, stable from October 7.
Fastmarkets assessed the aluminium P1020A premium, low-VAT market, delivered São Paulo region at $215-250 per tonne on October 28, stable since August 19.
The corresponding aluminium P1020A premium, high-VAT market, delivered São Paulo region was assessed at $110-140 per tonne on Tuesday, stable since September 2.
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