BofA-European Metals Mining Weekly AAL and TECK merger. Aluminium market. KAP site...-20250915

Anglo American and TECK merger of equals

AAL announced a combination with Teck through a merger of equals. According to therelease, expected annual pre-tax synergies are US$800m. An additional US$1.4bn (100%basis) annual average underlying EBITDA uplift is expected between Collahuasi andQuebrada Blanca from 2030-2049, with an expected increase of c.175t of potentialadditional annual copper output. A primary listing on LSE, with listings on JSE, TSX andNYSE, per the announcement. Anglo American shareholders to own c.62.4% and Teckshareholders to own c.37.6% of Anglo Teck plc immediately post completion. Anglo willpay special dividend of $4.5bn ahead of merger. Subject to regulatory conditions, themerger is expected to be completed in 12-18 months. (See report: Anglo and Teck tocombine).

Strategists: Aluminium is rebalancing, surpluses declining

Aluminium prices have been well supported in recent months, as global aluminium isrebalancing, reflected in our expectation of a 316Kt surplus this year, followed by a292Kt deficit in 2026. Next year's shortfalls are heavily influenced by reboundingdemand in the US and Europe, while China's consumption should hold up. A tighterEuropean market could increase competition for global aluminium units, especiallykeeping in mind that US consumers do not have to pay for the full 50% tariff yet. Thebidding for units could serve as a catalyst for aluminium prices to move higher and weexpect $3,000/t ($1.36/lb) by 4Q26. (See our report: Global Metals Weekly).