In the wake of the Western countries' ban on Russian aluminium, aluminium producers from the Gulf Cooperation Council expect their exports to increase to the United States and European markets.

This anticipation is based on the new sanctions package imposed by the United States and the United Kingdom against Russia-made aluminium. The LME and CME also recently announced that they would rule out Russian aluminium produced on or after April 13 in a bid to limit the metal's trade on global exchanges.

In this situation, GCC market analysts have identified a unique opportunity for the region to expand its international trade. Zaid Aljanabi, a principal analyst covering primary and secondary aluminium at CRU, stated, "There are more opportunities for GCC producers to gain market share with the diversion of metal away from Western Europe and the US amid new sanctions."

Overview of GCC's potential

At present, the GCC region is one of the world's top primary aluminium producers, having an output of 6.22 million tonnes in 2023, which represented about 9 per cent of the total global production. 

At the beginning of 2024, GCC's primary aluminium production continued its growth trajectory, with a production volume of 1.56 million tonnes during Q1 2024, up by 1.96 per cent from 1.53 million tonnes during the corresponding period of the last year. GCC companies noted that 44 per cent of the total regional production came from the United Arab Emirates (UAE).

The UAE is the fifth largest producer of aluminium in the world after China, India, Russia, and Canada, followed by Bahrain as the sixth biggest producer, according to the London-based commodities research firm CRU Group.

The preference shift in the market from Russian to GCC aluminium was already observed in 2023, with Russian exports falling by 45 per cent and UAE and Bahrain exports increasing by 26 per cent and 15 per cent, respectively. Further capitalisation of the market by GCC will depend on the expansion of its domestic production capacity and the improvement of its logistics network. 

Zaid Aljanabi said, "We expect that GCC producers could potentially see an increase in demand for their products, however, it is important to note that the ability of GCC producers to capitalise on this opportunity will depend on their production capacity as well as logistical challenges."