Hulamin’s operational performance continues to improve
PIETERMARITZBURG – Hulamin’s operational performance up to the end of Q4 2020continued to improve through October to December 2020 as markets stabilized following Covid-19 disruptions. Hulamin Rolled Products sold almost 46 000 tons (185 000 tons annualized). Both Hulamin Containers and Hulamin Extrusions performed better than expected and contributed positively to overall Group performance.
In line with aluminium trade actions throughout the Western world (most notably in the USA and EU), the South African government announced late in 2020 that a 15% import duty on rolled aluminium products would be imposed from January 2021.
With the major international markets now having significant duty barriers (most notably the USA, EU and Japan), competition from low cost countries has targeted unprotected markets such as South Africa.
Following more than 24 months of consultation with the full range of local stakeholders, the International Trade Administration Commission (ITAC) has now ruled that Hulamin has faced significant hardship as a result of unfair competition.
It is noteworthy that importers will be able to continue to trade free of duty from countries located within the four existing free trade agreements, including the EU and SADC.
Order books in Hulamin Rolled Products and Hulamin Extrusions have continued to remain full through Q4, while forecasts indicate demand remaining firm in the short term. Local demand for rolled products has improved since the duty announcement in late December.
Following the preliminary USA Anti-Dumping outcome (which was relatively positive for Hulamin), demand in this market has returned and prices are rising. Hulamin expects its position in USA common alloy markets to settle from neutral to positive once equilibrium returns over the coming six to nine months.
