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 strong.