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Stock and currency markets have been a little perkier the last week or so as expectations rise of some form of Chinese stimulus to boost demand — and, hence, global growth.

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That optimism, though, may be somewhat misplaced.

China has limited scope of debt-fueled stimulus of the type employed in the past, so a pick-up in demand resulting from fiscal measures may be more muted than some optimists hope.

Still, hopes were raised when Premier Li Keqiang closed a briefing to the National People’s Congress with a number of announcements. Beijing intends to use tools such as lowering bank reserve requirements, according to Bloomberg.

However, a promise to reduce VAT on manufactured goods from the current 16% to 13% from April 1 gave a definite fillip to traders and cast depression among hard-pressed aluminum semis manufacturers in the region. More competitively priced Chinese aluminum semi-finished product is the last thing regional aluminum producers want on their doorstep.

The measure is expected to further boost exports, which have already been running at near-record levels in 2018-19. According to Aluminium Insider, exports have risen from 517,000 tons per month last August to 552,000 tons in January to set a new record. Primary producers, who had been meeting to negotiate capacity closures in the face of slowing demand, are reportedly now likely to reverse that decision in the hope demand will pick up.

According to Aluminium Insider, the move is expected to pump in the region of CNY 600 billion (U.S. $90 billion) into the manufacturing sector, boosting the country’s gross domestic product by 0.6%. The move comes as the latest in a series of changes to the country’s tax regime conducted by Beijing, carried out to bolster the economy after manipulations of monetary policy and further debt-based spending have become increasingly difficult avenues for effecting change.

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Optimism is supported by the widespread belief that an agreement on China’s trade war with the U.S. is just a matter of weeks away — but the much-touted trade summit between President Donald Trump and Premier Li Keqiang has been postponed yet again, and may now not take place until well into April or even May.

A successful trade deal is by no means a certainty, as much as the markets will look for any deal to be better than no deal.


New Norsk Hydro CEO Hilde Merete Aasheim. Source: Norsk Hydro ASA

Norwegian aluminum maker Norsk Hydro ASA has a new CEO for the first time in a decade.

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The firm announced Monday that CEO Svein Richard Brandtzæg will be stepping down after 10 years. Hilde Merete Aasheim, executive vice president and head of Norsk Hydro’s primary metal business area, was appointed Brandtzæg’s successor.

“I am honored, and I very much look forward to leading Hydro into the next chapter, together with 35,000 competent and engaged colleagues around the world,” Aasheim said in a company release. “I am confident that we have what it takes to turn a current challenging situation, for Hydro and for the global aluminium industry, into opportunities that will build the company for the future.”

According to the release, Brandtzæg will remain with the company through the end of the year in an advisory capacity to Aasheim and the company’s technology board.

Reuters reported Brandtzæg had asked for an early retirement.

“It’s been a very hard year for (him), no doubt. It’s been a very demanding situation in Brazil,” Norsk Hydro Chairman Dag Mejdell told Reuters.

The Norwegian firm has struggled with embargoes on production at its Alunorte alumina refinery in Brazil following a heavy rainfall and flooding in February 2018 at the refinery.

Last year, Brazilian authorities ordered the firm to cut production at the refinery by 50% amid questions about a new bauxite residue disposal area; the Alunorte refinery resumed production at 50% capacity in October after briefly having shut down operations completely.

“The impact of the rainfall event in Barcarena, Brazil, in February 2018, has been thoroughly investigated through public agencies, professional reports from internal and independent third-party as well as public hearings,” the company said in its annual report for 2018. “Environmental authorities have confirmed that there were no leaks or overflow from Alunorte’s bauxite residue deposits.

“However, we did recognize a need to strengthen the robustness of the plant, and we have increased water treatment capacity to prepare the plant for future climate and weather changes. Our clear ambition is to make Alunorte the benchmark in our industry, ensuring sustainable operations and social development in the communities around us.”

Norsk Hydro last week announced its financial results for 2018, reporting net income of 4,232 NOK ($505 million), down from 9,184 NOK ($1.07 billion) in 2017. The firm’s share price also took a hit in 2018, closing at 39.21 NOK ($4.58) from a 2017 closing price of 62.35 NOK ($7.29).

“The curtailment at Alunorte has weakened our financial results and progress of our improvement program,” the annual report stated. “In addition, different tariffs and sanctions have influenced global markets and trade flows over the past year, also affecting our industry.”

Norsk Hydro added that the production embargoes on the Alunorte alumina refinery remain in effect.

“Hydro is in dialogue with all the relevant authorities, at the local, regional and national level in Brazil,” the company stated in its annual report. “We continue to seek a common agreed solution, so we can resume normal operations, using the new and modern deposit area and the state-of-the-art press filters. At the time of authorizing this report, the production embargoes on Alunorte remains in force. The timing with regards to when the embargoes may be lifted remains uncertain.”

The firm expects ramping back up to 75-85% capacity will take about two months (once the embargoes are lifted), adding that the “timing of a return to full production capacity at Alunorte depends on the commissioning process of DRS2 and the press filters.”

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Revenue from the company’s bauxite and alumina operations last year fell to 2,282 million NOK ($266.6 million) from 3,704 million NOK ($359.2 million) in 2017.