• 2 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 4 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 6 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 7 hours Schlumberger Warns Of Moderating Investment In North America
  • 8 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 9 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 11 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 12 hours New Video Game Targets Oil Infrastructure
  • 14 hours Shell Restarts Bonny Light Exports
  • 15 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 21 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 1 day British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 1 day Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 1 day Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 1 day OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 1 day London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

World’s Biggest Miner Prepares For The EV Boom

The world’s top mining company…

Alt Text

Busting The Lithium Bubble Myth

Lithium demand continues to grow…

Growing Competition for Natural Resources Leads to Daily Pricing for Alumina

Growing Competition for Natural Resources Leads to Daily Pricing for Alumina

We've all heard the lines about increasing global competition for natural resources.

The world is not the same as it was ten or even five years ago. New sources of demand have emerged for oil, iron, copper and natural gas. And competition for all of these resources has become fiercer.

This isn't just talk. Watching the news, you can see the signs of "elbows out" resource markets all over the globe.

Case in point. This week, metals data provider Platts announced it will start publishing the world's first daily alumina price.

Traditionally, alumina (the ore that smelters use to make finished aluminum) has been priced indirectly. The industry simply used a percentage of the world price for finished aluminum. This was seen as an acceptable proxy for alumina demand.

But demand for the input commodity can be different than demand for the end metal. If smelters foresee a pick up in aluminum demand, they might start aggressively buying alumina in order to start turning out new product. In such case, alumina demand (and therefore price) might be going up even as aluminum metal prices stay relatively calm.

In the past, this wasn't a big deal. Alumina producers sold supply under long-term contracts to several buyers globally. The market was fairly orderly.

But with aluminum smelting capacity picking up in places like China, things are getting more complex. With more users (and more geographically diverse users), the global demand profile can change quickly.

Alumina producers (not to mention investors and traders) want to know about these changes. If a buyer in Shanghai is ramping up output and willing to pay more than a European smelter, producers want to shift supply to this higher-value market.

In order to make such adjustments, you need to be able to see emerging sources of demand. A daily price helps detect such.

Welcome to the competitive resource marketplace. It's more complicated and dynamic. Things change quickly, and everyone wants to be able to adjust in near real-time.
Long-term contracts are being shunned for spot pricing. Meaning that assured supply is getting harder to find.

This is one of the reasons we're seeing end-users of many commodities get aggressive in purchasing direct interests in mines and oil fields. If you can't secure supply contractually, you need to own the supplier.

By. Dave Forest of Notela Resources




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News