Aluminium industry’s future looks bright despite the challenges, says EGA | Aluminium industry’s future looks bright despite the challenges, says EGA -
Walid Al Attar (Chief Marketing Officer: Emirates Global Aluminium

Aluminium industry’s future looks bright despite the challenges, says EGA

: Wednesday, June 18 - 2014 @ 15:34

The global aluminium industry will have to confront several major challenges as it looks to sustain its steady growth trajectory through 2020 and beyond. So said Walid Al Attar (Chief Marketing Officer: Emirates Global Aluminium PJSC (“EGA”)) in an address entitled “Why the aluminium market stands at a crossroad: Tough challenges and critical decisions” that he delivered at Harbor’s 7th Aluminium Outlook Summit (“Harbor 2014”) which took place during early-June in Chicago, USA.

Al Attar – a 30-year industry veteran who is responsible for developing and implementing EGA’s global marketing and sales strategy – began by reiterating analysts’ predictions that the primary aluminium industry would continue at a compound growth rate of 5.8% per year for this decade to top 70 million tonnes by 2020, driven largely by demand from the construction, transportation and electrical sectors. Additional production capacity is planned for the period, primarily in China (mainly for internal consumption) and the Middle East – but will be inadequate to meet the greater demand. However, the much-needed capacity expansions are unlikely due to the prevailing low London Metal Exchange (“LME”) price, which is substantially below the level required to justify investments. “The capacity shortage is likely to affect value-added products most, as it is here that there is a particular need for additional investment in production capacity to cater for the anticipated growth in demand,” said Al Attar. “This challenge highlights the need for additional smelter capacity and casting facilities that specialise in value-added products like extrusion billets, foundry alloys and sheet ingots.”

Another key challenge is price diversion, due to the increased proportion of premiums in the all-in aluminium price. “Ingot premiums today are five times higher than six years ago – and this is having severe repercussions on the supply chain, especially in industries that do not have a pass-through formula for premiums, such as automotive wheel-makers,” commented Al Attar.

From a Middle East perspective, a particular challenge to the primary aluminium industry is the duty barriers – created through the imposition of import tariffs – which are hampering trade opportunities. As Al Attar explained, “The imposition of import tariffs in certain regions – such as Brazil, India and Europe – is distorting the free flow of aluminium by unfairly benefiting other aluminium producing regions, disadvantaging regions such as the Middle East and Russia, and adding costs to the semi-fabricators in those markets.”

EGA is the jointly-owned aluminium conglomerate formed by Mubadala Development Corporation and Investment Corporation of Dubai that combines the businesses of two of the UAE’s flagship industrial companies, Dubai Aluminium PJSC (“DUBAL”) and Emirates Aluminium PJSC (“EMAL”). EGA has a total production capacity of 2.4 million tonnes per year following the full commissioning of EMAL Phase II mid-June – placing EGA among the top five aluminium producers in the world outside China. Indeed, EGA is well-placed to benefit from the increased global demand for value-added products, which form the major share of the company’s annual production.

EGA was the lead sponsor of Harbor 2014, which is the largest and most strategic aluminium market gathering in the Americas. EGA’s participation reflected the group’s stature in the global and regional industry (being the largest producer in the Middle East) and the importance of the region as a market to EGA. The Americas accounted for nearly 15% of EGA’s global sales in 2013 – more than 280,000 tonnes in all – and this is expected to grow in the short-term.

Today's Top Stories

Posted by

Wednesday, June 18- 2014 @ 15:34 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

AME Info Services







Business DirectoryVIEW ALL

Search by name

Search by industry

Browse alphabetically





JobsVIEW ALL

Search for jobs

Latest Jobs