Producers say time in not right to invest in new capacity
Oman and Qatars aluminium producers have no immediate plans to carry out long-talked-about expansions at their smelting operations, according to executives.
Sohar Aluminium and Qatar Aluminium (Qatalum) have both talked about second-phase expansion projects at their smelters in the past but have faced barriers including market conditions and energy allocations.
Aluminium smelting is an energy-intensive process and operations in the GCC typically require large volumes of gas to fire power plants connected to the smelter.
Sohar Aluminium has been designed from the in inception [to be expanded]. This will all be subject to allocation of energy, pricing and appetite, Sohar Aluminium CEO Said Almasoudi said.
The potential project is there we are working towards it. I cannot give you a timeline for the time being, he added, speaking at the Arab international Aluminium Conference (Arabal) in Dubai on 22 November.
Sohar Aluminium has focused on reducing costs and incrementally increasing production from its smelter in Sohar. Production has increased from 375,000 tonnes a year (t/y) to the current 394,000 t/y. We are heading to achieve the full potential of 400,000 t/y, said Almasoudi.
Qatars Qatalum completed its smelter in 2009 and said at the time that there would be a second phase but this has yet to emerge.
Qatalum CEO Khalid Larem told the Arabal conference that the potential for phase two would be dictated by the global aluminium market and energy prices.
If you look at the commodities and energy prices, I dont think we can invest in a second phase today, said Larem. However, he added that Qatalum is currently producing at 8-10 per cent above its design capacity.
The only project underway to increase primary aluminium capacity in the GCC is the construction of a sixth pot line at Aluminium Bahrain (Alba) smelter.
Elsewhere in the Middle East and North Africa (Mena), Egypt and Iran are both looking to expand capacity.
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