Managing Director AZ Global Consulting Limited
The Chasm Between Demand and Supply
The reality right now is that there is not enough metal in the world today that can even remotely be called green. The goal of 4 tonnes of CO2 is handy for the industry, or at least those in the industry who can achieve this level, but it is an artificial construct based on what the supply side can achieve today, not what consumers demand. While it’s true that for many industries, the standard of “zero carbon aluminum” is not mandated until the second half of the next decade, the fact is, it is going to take about that long for the aluminum industry to get to zero. To put it another way, the supply side is largely stuck where it is today, but the demand side for truly green aluminum is only growing. The chasm between supply and demand for zero carbon aluminum is going to widen significantly.
My point is, any new investor seeking to capitalise on the demand is not incentivised today. First, he has to find hydroelectric power (or nuclear I guess). Second, he has to wait until the inert anode is a proven commercial and viable option. Then it takes 4-5 years to build a smelter. Any inert anode smelter will have zero experience in operating this brand new plant, so it could take another 1-2 years to stabilise. It could be well into the next decade before such a plant really delivers. And what if a smelter retrofits the technology onto a new plant? That will be great for the environment but will do nothing for volume, since the existing output will be greatly reduced while the plant goes through retrofitting, and may not come back to its previous levels – there is little argument that the inert anode will increase output, only that it will increase costs. So all in all, the industry is going to be in for some very hard times over the next several years.
Paul Adkins, Founder and Managing Director of specialist consulting firm AZ China Ltd, has had over 30 years’ experience in the aluminium industry, including 13 years at Alcoa, 4 years at Tomago Aluminium and 3 years at Alcan Australia.
Paul did his undergraduate studies at Deakin University in Australia and attained his MBA with Merit from the Newcastle Graduate School of Management in Australia.
From 2001, he was Raw Materials Manager at Tomago Aluminium, before being seconded to Alcan early 2005 to set up their Global Sourcing office in Beijing China. Paul was also involved in Alcan’s FECRI project, which was aimed at significantly reducing the cost of building new aluminum smelters.
On completion of that assignment, Paul chose to remain in China and to establish his own business. Paul has been Managing Director of AZ China Limited since 2007.
AZ China is a specialist consulting company, with focus on the global and Chinese aluminium industry. AZ China publishes multi-client reports on the market trends and outlook, as well as providing consulting services to individual clients. AZ China has been holding conferences since 2008. As the aluminum and raw materials markets have evolved, so has Paul’s company, which in 2022 changed its name to AZ Global Consulting Limited.