Hulamin reports third quarter sales recovery

Aluminium group Hulamin said on Wednesday third-quarter sales to end-September have improved, with order books in all its operations approaching normal levels.

Group sales in the third quarter ended September rose to 45,000 tonnes, from 29,000 tonnes in the second quarter, with Hulamin saying confirmed orders for beverage can products, heat-treated plate and extrusions were particularly healthy.

Hulamin had been hit hard by Covid-19 shutdowns in its first half, and has said that due to the high fixed-cost nature of its business, improved volumes were key to its return to profitability.

Group sales in its six months to end-June had fallen 35% to 71,000 tonnes.

Hulamin also announced on Wednesday that the preliminary findings of the US department of commerce antidumping case against common aluminum products had been released, with SA's duty set at 8.98%.

This has been an ongoing threat since March, and had investigation had already weighed on its ability to sell these products in that country. 

Historically, the US represented less than 15% of Hulamin Rolled Products’ total sales — a business which generated about 94% of the group's R3.7bn revenue to end-June.

Hulamin has said previously this affected largely low-margin products it was seeking seeking alternative product and market opportunities due to this threat.

The antidumping duty to be implemented for common alloy aluminium rolled products range from 0% for Italy to 353% for Germany, with 18 countries affected.

The US Department of Commerce is scheduled to announce its final determinations on about February 22, and if upheld, the US International Trade Commission will make its determination in April.

Hulamin has denied dumping, and said previously it had appointed legal counsel.

In afternoon trade on Wednesday Hulamin's share was up 5% to R1.05, on track for its best performance in just over two weeks, and giving the group a market capitalisation of R336m. The group’s share has more than halved so far in 2020.

gernetzkyk@businesslive.co.za