FORT LAUDERDALE, Fla.
The merger of Emirates Aluminium Co. Ltd. (Emal) and
Dubai Aluminium Co. Ltd. (Dubal) to create Emirates Global
Aluminium (EGA) is expected to be completed this month,
according to a company official.
EGA will become the
worlds fifth-largest aluminum company by production and
make the United Arab Emirates, where Emal and Dubal are based,
the fourth-largest aluminum-producing country, Walid Al Attar,
executive vice president of marketing and sales for Emal/Dubal,
said. Al Attar said he would become EGAs chief marketing
officer once the deal had closed.
The formation of EGA
was initiated in mid-2013 (
amm.com, June 4).
EGA plans to boost its
supplies to the Americas as regional supply deficits grow,
especially in North America and Western Europe, while Middle
East countries in the Gulf Cooperation Council (GCC) region
have a production surplus, Al Attar said. "This attests to the
Mideast smelters overall intention to remain significant
exporters of primary aluminum to world markets," he said Jan.
13 during a presentation at the Platts Aluminum Symposium in
Fort Lauderdale, Fla.
Most of the production
will be devoted to value-added products, Al Attar said, and
EGAs entire annual production is pre-sold. "As such, EGA
has no intentions of curtailing production levels at either
facility," he said.
But the scenario is
different in much of the rest of the world, where Al Attar said
a P1020 inventory overhang has been aggravated by warehousing
incentives that have dented London Metal Exchange prices and
threatened the profitability of producers. EGA has not
contributed to that problem, he said.
"Every ton of product
cast ... is consumed by our customers. As a result no Dubal or
Emal metal is actually placed in LME warehouses," Al Attar
said. But EGAs competitors have devoted much of their
production to remelt ingot, which has led to a "massive"
inventory accumulations in warehouses, low product
availability, low LME prices and high premiums, he said.
Al Attar also
criticized "protectionism" for distortions in the world
aluminum market, citing levies in the European Union in
particular, as well as what he characterized as a production
glut from uncompetitive smelters in China.
But Al Attar
repeatedly returned his ire to the influences of
warehouse-financing on the aluminum market. "The woes faced by
the global aluminum industries are related primarily to the
warehousing dynamics, resulting in a remelt overhang and an
associated depression in the LME price," he said, although he
noted that the outlook for value-added products remains