Aluminium Bahrain BSC (Alba) would like to sell more of its
material in North America, chief executive officer Tim Murray
said in an interview at AMMs Aluminum Summit in
"We have 70 percent of
our sales in the Middle East, which is actually too much,"
Murray said. "We would like to diversify and put a little bit
more of that into North America."
Alba currently sells
about 4 percent of its production to North America, 11 to 12
percent to Europe and 15 percent to Asia. "We would like to
balance that a little more, but where Asias at we
probably want to stay (and) Europe we probably dont want
to go much lower, so ... we probably need to take a little more
into North America," he said.
Ideally, the company
would like have a balance of 15 percent of sales in Asia, 10
percent in Europe and 10 percent in North America, Murray said.
North America "is booming in terms of the physical market. It
really is a market we would like to grow."
fundamentals in the United States are much better than they are
in Europe, he said. "U.S. construction is OKits not
at a super rate, but even a small uptick is a very big uptick
in quantityso I think in terms of the housing market,
its relatively stable and youre actually going to
see some pickup. And automotive is booming; its out of
recently joined the Aluminum Extruders Council (
amm.com, March 18)enter the U.S. market with
its billet and foundry products, it would be a long-term
commitment, Murray said. "Were not looking to come in and
leave again. If were coming in, were coming in for
the long run." He added that North America has the "best
premium net back today in the world."
The expected 2013
ramp-up of the 740,000-tonne-per-year Maaden smelter in
Saudi Arabiaa joint venture of Pittsburgh-based Alcoa
Inc. and Riyadh-based Saudi Arabian Mining Co.is likely
to catalyze Albas push into other markets, according to
smelter will "relieve some pressure" from Alba as it cant
currently meet all the supply needs of its customers in the
Middle East, he said. "Our customers ... all want more metal;
even with all this capacity in the Middle East, most of
its being exported. Alba is really the only one that is
selling in Bahrain."
The Saudi Arabian
market is set for strong demand going forward, with the
construction sector growing 8 to 10 percent per year, Murray
said. "The market needs the metal. So if you look at us, we
lose a little share (to Maaden) but in terms of our
absolute volume I dont think it will change much."
Given the strong
returns in North America, Alba would "happily sell" there if it
had metal"but we actually dont have the metal"
The company is looking
at bringing on new output and is aiming to complete a
feasibility study on a sixth production line by the end of the
year. Should the sixth line go ahead, it would add about
400,000 tonnes of capacity at a cost of about $2.5 billion,
The company also is
not opposed to moving upstream as a cost-controlling method,
given that it currently buys all of its raw materials
externally. "If we found the right aluminum bauxite project, we
would be interested," Murray said, although the company would
be more interested in an offtake agreement or an equity stake
in such an asset rather than controlling and operating it.
"Were not looking to run refineries."
Going forward, the
most imminent challenge for Askar, Bahrain-based Alba and the
industry as a whole is the ongoing disconnect between the
aluminum price on the London Metal Exchange and the price in
the physical market, Murray said.
In addition, the high
premiums in the physical market have kept many producing when
they may otherwise have cut production or gone out of business,
he said. "Everyones sitting on the fence; no one wants to