NEW YORK Middle
East countries in the Gulf Cooperation Council (GCC) should see
dramatic aluminum production growth through 2015 as the region
looks to become a top supplier to the rest of the world,
according to one executive at AMMs Aluminum
Summit in New York.
GCC countries are able
to serve both the East and the West, and the region is
developing into a global logistics center, according to Walid
al Attar, executive vice president of marketing and sales for
Emirates Aluminium Co. Ltd. (Emal) and Dubai Aluminium Co. Ltd.
(Dubal), both based in the United Arab Emirates. The two
companies announced a merger earlier this month to create
Emirates Global Aluminium (
amm.com, June 4).
production capacity in the GCC is expected to grow about 36
percent to around 5 million tonnes annually by 2015 from 3.7
million tonnes last year, of which 740,000 tonnes were consumed
in the GCC region and the balance exported, al Attar said. On
the downstream side, production should grow about 88 percent to
around 2.3 million tonnes annually in 2015 from 1.2 million
tonnes last year.
"These figures confirm
that the GCC is an important hub in the global aluminum
industry," he said, noting that the regions smelters are
some of the worlds newest and most technologically
The GCC and the Middle
East are expected to account for 32 percent of the worlds
primary aluminum expansions between now and 2015, second only
to China, al Attar said. But the greatest growth over the next
eight years will likely be in rolled products as the GCC looks
to displace imports and compete on the export front, especially
to markets in the Middle East, Africa and South Asia.
The recession of the
past four years has seen a buildup of aluminum inventories in
North America, Europe and, to a lesser extent, China, al Attar
said. "But when the global recovery kicks in and accumulated
inventories are drawn down, aluminum demand will continue to
exceed production capacity, with predictable consequences."
Despite those rosy
forecasts, GCC primary aluminum producers face several
challenges, including establishing a long-term customer base
and securing the raw materials necessary to fuel growth in the
region. Import tariffs are perhaps the biggest hurdle to clear,
he said, and the GCC needs to ensure that its smelters have
access to global markets.
Al Attar focused on
tariffs in the European Union, which he said "unfairly benefit"
some producers exporting to the E.U. and "disadvantage" others
while adding costs to all European fabricators. E.U. import
tariffs on primary aluminum "are out of line with both the U.S.
and developed Asian countries," he said.
production is "essentially neutral," the only regions that can
supply material to meet metal deficits in other parts of the
world are Russia and the GCC, keeping regional fabricators
competitive, al Attar said. "The E.U. tariff structures
basically restrict market supplies and distort market pricing
and ultimately global flows," he said, arguing that a solution
to "the discrimination against GCC smelters" needs to be found
before "E.U. customer relationships are damaged any
The GCCs push
into the aluminum industry, including high-quality casthouses,
comes as the region look to move beyond its traditional
dependence on the oil and gas markets, al Attar said.