EGA delays its IPO attributing to US additional import tariffs on aluminium and steel

A planned share sale in the UAE could be the latest casualty of President Donald Trump’s trade policies. For instance, Emirates Global Aluminium, owned by Mubadala Development Company of Abu Dhabi and Investment Corporation of Dubai, has already delayed its initial public offering (IPO), as per the report from a relevant source.

The company without elaborating much on the incident only confirmed the news through an e-mail, stating that the delay in releasing IPO is attributable to unfavourable market conditions, which shows no sign of improvement until later in 2019.

In May, the chief executive officer of Mubadala Investment Co. Khaldoon Al Mubarak had said that EGA could go public in the second half of 2018 or early 2019.

But now the delay in declaring IPO could be due to the additional tariffs levied by the US administration on aluminium and steel imports.

EGA reportedly exports around 90 per cent of its output considering the US a key market.

The United States’ global trade war, particularly with China, has affected all industrial metals, but for aluminium producers the pain has been intensified by a surge in the price of alumina, the main ingredient used to make the metal.

Last year, EGA had produced 2.6 million tonnes of cast metal and became the third-largest producer of primary aluminium outside China.

EGA, however, has completed its preparations and is ready to proceed as soon as market conditions are suitable,” said the company itself.

EGA sells to customers in more than 60 countries, according to its website. Its smelter in Abu Dhabi includes the world’s longest production line, or pot line, spanning 1.7 kilometres (1.1 miles), the company says.