Tuesday 19 March 2024
 
»
 
»
INVESTMENTS TO REACH $20bn

GCC smelters stand to gain from new market trends.

Gulf aluminium production to hit 5m tonnes by 2015

DUBAI, September 23, 2014

The volume of aluminium production in the Gulf region is expected to increase to five million tonnes by 2015, accounting for 17.5 per cent of the total global output, compared with 3.7 million tonnes in 2012 or 11 per cent of the total world production.

Gulf investments in the aluminium sector are expected to reach $55 billion by 2020, compared with $30 billion in 2011, thanks to expansion of smelters and new projects in the region, said a report released ahead of the Aluminium Middle East 2015, which will be held from April 14 to 16 next year at Dubai International Convention and Exhibition Centre (DICEC) in Dubai, UAE.

Globalisation, market dynamics, environment and energy prices are redrawing the world aluminium industry map, with the Middle East in general and the Arabian Gulf countries in particular emerging as the potential winners of the new business paradigm, said Daniyal Qureshi, group exhibition director at Reed Exhibitions Middle East, the organiser of the event.

These mega trends, along with the opportunities for the GCC to benefit from them, will be highlighted at the Aluminium Middle East, the biggest specialised aluminium industry exhibition of its kind in the region that brings together manufacturers, producers, investors and services providers under one roof.

“The exhibition will put the aluminium market mega trends under the spotlight and define the best ways for the Middle East in general and GCC, in particular, can benefit from these trends,” said Qureshi.

The exhibition will be held under the theme "Forging Connections…Building Possibilities".

Aluminium industry experts say that the world will go through a fundamental transformation in all walks of life during the next 50 years, including where we live, what we consume, how we travel, and what we eat. These changes will fuel the demand for aluminium products worldwide and open the doors for those who are able to innovate and come up with what the world needs, he said.

A study by Brookings Institute estimates that by 2020 more than three billion people will join the middle class, inclined to spend more on food and beverages, housing, electronics and travel, all of which are aluminium-guzzling industries.

The Aluminium Manufacturers and Producers Association expects the aluminium world demand to grow 6.5 per cent annually which will see doubling of the production and consumption from 35 million tonnes in 2010 to more than 70 million tonnes by 2020.

Aluminium is among the industries that are greatly affected by globalisation forces, which geographically redistributes production and consumption centres to benefit from cheap labour, energy and shipping costs, in addition to proximity to bauxite mines and less stringent environmental roles. There is also a shift towards lighter and stronger materials in many industries.

Parallel to these changes, recycling is another mega trend shaping the industry, not only because it is an integral part of the industry’s environmental policy, but also due to huge economic savings that recycling brings.

The global recycling industry is estimated to be in excess of $200 billion in annual revenues, of which $75 billion is generated by the US.

According to Aluminium International Institute, producing one kilogram of aluminium from bauxite requires 45 KWH of electricity, compared with only 2.8 KWH using recycled aluminium, almost a 90 per cent saving in energy costs.

A study by Frost &Sullivan that looked into the future of Middle East aluminium industry until 2020, suggests the region’s share of aluminium world production to rise to more than 15 per cent by 2015, up from 6.2 per cent in 2007.

Despite the increase in Middle East’s strategic importance in the aluminium production matrix, the biggest chunk of the region’s production remains pure aluminium for export.

The region has a long way to go in moving away from exporting pure aluminium to products, similarly to what happened when it moved from exporting crude oil to exporting petrochemicals, said Qureshi.

According to the study, Middle East’s aluminium exports will increase from 76 per cent of all the production in 2013 to 85 per cent by 2020.

If the Middle East has to benefit from the new paradigm, experts say companies need to enter into partnerships with bauxite mine owners to hedge themselves against  price fluctuations in the free market and the disruption of deliveries due to political instability in bauxite-exporting countries.

Aluminium companies should also realise the urgency of increasing their research and development (R&D) budgets to develop more effective production techniques, reduce costs, extending longevity of the bauxite mines lifespan and innovating new high-value products, especially in the aerospace and consumer electronic sectors.

The event is expected to attract over 200 exhibitors from 25 countries. The number of unique visitors at the 2015 edition is also expected to reach 4,000, a 14 per cent increase over the last edition, which attracted 3,523 visitors. - TradeArabia News Service



 




Tags: Gulf | aluminium | production |

More Industry, Logistics & Shipping Stories

calendarCalendar of Events

Ads