Middle East aluminium demand on increase

17 March 2010

Demand could return to 2008 levels by end of year

Middle East demand for aluminium is set to return to 2008 levels this year, a full two years ahead of the US and Europe, according to a senior aluminium analyst.

Speaking at the MEED Middle East Aluminium 2010 conference currently being held in Dubai, Marco Giorgiou, head of aluminium primary and products for the UK-based CRU Analysis, said that while 2009 was a difficult year for the industry, signs of recovery were now being seen in some regions.

“We do expect an improvement [in demand] this year. The greatest improvement in demand will be in the emerging economies such as China, South East Asia and also here [the Middle East],” Giorgiou says.

“We expect the Middle East to recover to 2008 levels later this year, a much faster recovery than in the North America and Western Europe. We don’t expect a full recovery until 2013-14 in those markets,” he adds.    

Giorgiou also says that due to the recovery in prices, aluminium producers were now working with profitable margins.

“The margin of cost support level for aluminium producers is $2,000 per tonne now, which means that at today’s prices [about $2,500 per tonne] most producers are able to make money,” Giorgiu says.  

The analyst also predicted that producers in the Middle East would need to widen their customer base as capacity increases in the region.

“Middle East producers will need to find new markets due to their increased metal output as well as ensure that the local markets are well supplied,” Giorgiu says. “Local metal producers are in a good position for future growth and are likely to displace other more established producers in the global market.”

The analyst also forecast that global consumption would grow by 12 per cent in 2010. Most of the growth would come from China.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications