Thursday, 21 March 2013

The Growth of Aluminium in the Middle East

The value and potential of aluminium in the transport and construction industries has been recognized over the past two decades.  This precious metal continues to gain popularity as an alternative to steel and iron due to its favourable properties. Its light weight coupled with strength, has allowed it to be the preferred material in the transport and construction industry. Its ability to be recycled at a mere fraction of the initial production cost of primary aluminium has accelerated aluminium growth in Middle East and solidified its position as a sustainable metal.

aluminium producers in the Middle East.

The use and consumption of aluminium is present in most industries today with the automotive and construction industry preceding the rest. Another industry that is a major consumer of aluminium is the packaging industry. The Aluminium market is shifting towards the Middle East bringing with it good opportunities and a lot of potential for growth.  The Aluminium industry is also experiencing an increased aluminium production mainly in Saudi Arabia, Bahrain, Iran and the UAE due to the availability of cheap energy in the region. Aluminium growth in Middle East further benefits from advantages such as rich bauxite reserves as well as economical energy. Even the close proximity of the GCC region to European countries, enables smelter operators to further reduce costs.

 Aluminium industry in middle east

Primary Aluminium production in the Gulf has been on the rise throughout 2011 and 2012 with the commissioned Qatalum smelter reaching its full capacity of 585kt. Thus, the aluminium production growth rate is expected to sustain itself over next few years. The GCC region is estimated to have already invested around Dhs17.3bn into aluminium projects and plans to invest an additional $968bn in major projects over the next ten years. The aluminium industry has now emerged as one of the major economic drivers for the Gulf, contributing to increased job creation. It has also accelerated the growth of both small and medium size industries thereby contributing to community development in the UAE.

An estimated 80% of aluminium produced in the Gulf is exported to different parts of the world. This has reaffirmed the GCC’s vital role to meet local, regional and global demand. Therefore it will not be too long before the smelters in Europe and the US face cut throat competition due to Middle East Aluminium market trends that have resulted in both mass production as well as a cheap supply from aluminium producers in the Middle East.

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