Senior executives from Qatalum, Ma’aden, Soahr Aluminium, Dubal, Emal, Hydro, and other firms took part in panels, workshops and presentations – making the future of GCC aluminium the main focus of the conference, through its relationship with the rest of the global industry and the macro economy.
In the first session of the day, entitled ‘What will the Aluminium Industry Policy in China be for 2012-2013?’ Mr. Paul Adkins, Director of AZ China Limited and Mr. Eric Zhang, Analyst at SMM presented on the peculiarities of the Chinese industry, which persists with enormous production despite heavily subsidised losses – in certain provinces in particular.
As Adkins noted, “China Sits in the top quartile of the global cost curve, and its industry consumes scarce energy resources, is forced to import raw materials, and jeopardizes environmental integrity, yet 10mt of new capacity are still to come online.”
“Why on earth do the Chinese persist with making aluminium?” he asked rhetorically. “As Westerners and as analysts and corporates, we focus on the markets, the industry, equities, P&L, capital flows, ROI, etc. But by doing so, we can miss the key point: for the Chinese Communist Party, aluminium is an important conduit for the development, urbanization and modernization of China,” he said, reminding the audience that China’s aluminium industry has been privatized – if such a term is accurate in such a Statist country – only one generation.
Eric Zhang forecast that domestic aluminium prices will face many uncertainties in 2013 and are subject to LME aluminium prices to a large extent. SMM expects domestic aluminium prices to fluctuate between RMB 15,000-17,500/mt in 2013.
The role of China was a theme carried into the next session; with a presentation by Jorge Vazquez, Managing Director of Harbor Aluminium Intelligence, who spoke to delegates on who is winning and losing in the global aluminium industry and supply chain today.
“Who is getting the value?” he asked. “It is not the producer for sure”. Today, consumers are getting great value ever, with a graph of real LME aluminium prices at a cycle bottom below $2,000/m, compared to historical average of $2,650, and a high of about $4,700,” he added.
He finished by forecasting two main sources of growth in next five years: Emerging Asia – including the Gulf – and the Americas. Over 16 million tons of new aluminium capacity should hit the market by 2015, two thirds of this in China for domestic consumption. The Middle East too is well placed. “We see the Middle East as the leading provider for growing world metal needs ahead and Americas/Europe/South East Asia as increasing import players,” he added.
The next panel discussion was on Automobile Industry outlook in economic slowdown. David Cutting, Director of J.D. Power Automotive Forecasting, spoke about the Global Light Vehicle Market – heavily dependent on aluminium – saying it has come a Long Way. In, 2012, Global Light Vehicle Sales are holding in positive territory, while in 2013, Global Light Vehicle Growth is forecast to be steady with moderate risk. If there is one trend in the global automotive industry besides platform consolidation, however, it is uncertainty, Cutting argued.
The GLV Market is predicted to break through the 100 million barrier by mid-decade, almost doubling in size since the end of the 1990s. Emerging markets, led by China, India, Brazil and Russia, have driven much of the recent growth and are expected to remain key drivers to future growth. Light vehicle production growth in Asia is expected to significantly outpace the other regions (with share of output increasing from 48% in 2011 to 53% by 2016). “Scale brings fragmentation and a new definition of platform”, he said, pointing to how platforms have changed beyond recognition in the last 20 years.
Shambhu Prasad, Senior Expert at Gulf Organization for Industrial Consulting, noted that Aluminium usage has increased to 140 kg/car in 2011 – predominantly in drivetrain, chassis and suspension and body. The automotive industry is the largest market for aluminium castings, and these account for more than 50% of aluminium used in cars.
The afternoon session of the final day saw presentations on safety standards, design controls and ‘Aluminium Perfection, Sustainable Resource & Process’, by Dr. Mufeed Odeh, Sustainability Manager at Qatalum.
‘Sustainable development is one that meets the needs of the present without compromising the needs of future generations’, was the definition he gave, saying that it includes within it recognition that the needs of the less fortunate should be given priority. It also comprises the idea of limitations caused by current technology and social organisation on the environment’s ability to meet present and future needs.
‘Sustainability is transition, from short term to long term thinking, from a linear flow of resources to a systems’ flow, from fossil fuels to integration of alternatives, and seeing environmental, social and economic challenges as not separate and completing, but as interconnected and complementary.
“Our strategy is to reduce, reuse and recycle,” he said, emphasizing tight controls on processed water, green surroundings, controls on emissions, all in line with the Qatar National Vision 2030 pillars – which emphasize social and environmental development too.
The day and the conference as a whole wrapped up with a Culture Night at Skeikh Faisal Bin Qassim al Thani Museum, with a tour of the museum followed by a dinner at Majlis hall, at which delegates could discuss the connections made, information shared and arguments put forth over three days of discussion about the aluminium industry at national, regional and international level.
Saturday, November 24- 2012 @ 9:09 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.