AME Info
UC Rusal highlights key issues in the global aluminium industry at Arabal
Edited by : AL CIRCLE
2 min read
Oleg Mukhamedshin, Deputy CEO of UC Rusal, the world's largest aluminium producers, spoke at the 16th Arab International Aluminium Conference (Arabal) highlighting some of the key issues and opportunities in the global aluminium industry.
Despite a steady increase in global aluminium consumption, low aluminium prices on the LME continue to hit the industry, exposing risks and imbalances. According to Rusal's estimates, based on actual cash costs, between 20 and 30% of aluminium ex-China capacity is currently unprofitable, depending on the premium level. In China, this situation appears magnified, with almost one third of capacity under water at today's price levels.
In this context, the Middle East's recent growth to become a major aluminium producer is significant, offering opportunities, but with some challenges. The region has grown to an impressive 7.7% of global production in 2011 after a decade of investment and is projected to reach 8% by 2015. Yet, while the aluminium consumption in the region is due to grow by 7.7% p.a. between 2012 and 2016, production is estimated to grow at 8.6% p.a. producing an increasing surplus, which, according to Rusal's estimates, will reach more than 3.0 million tonnes by 2016. Suppressed aluminium LME prices, increased prices for natural gas and restricted bauxite and alumina resources are the major challenges GCC producers will have to tackle to secure their future prosperity.
According to Mr Mukhamedshin, large bauxite reserves and spare alumina capacity could make UC Rusal a partner of choice for GCC producers as they seek to address the challenge of cost-effective supply of raw materials to underpin their production growth.
"The region relies on alumina import and therefore remains exposed to external market conditions. Rusal has strong positions in both bauxite and alumina that could offer scope for mutual interest partnerships that would strengthen the Gulf producers' competitiveness and secure their future resources requirements," said Oleg Mukhamedshin, UC Rusal's Deputy CEO and Director for Strategy and Business Development.
"Overall, the world needs a competitive market for aluminium where prices are kept at reasonable levels for consumers by competition and efficiency and where competition pushes us towards new energy-efficient technologies. An open dialogue is critical for future health of the sector. Arabal 2012 is an important initiative from the Gulf Aluminium Council and I welcome the opportunity to discuss how we can work together in future to realise the potential of the global industry," he added.
Despite a steady increase in global aluminium consumption, low aluminium prices on the LME continue to hit the industry, exposing risks and imbalances. According to Rusal's estimates, based on actual cash costs, between 20 and 30% of aluminium ex-China capacity is currently unprofitable, depending on the premium level. In China, this situation appears magnified, with almost one third of capacity under water at today's price levels.
In this context, the Middle East's recent growth to become a major aluminium producer is significant, offering opportunities, but with some challenges. The region has grown to an impressive 7.7% of global production in 2011 after a decade of investment and is projected to reach 8% by 2015. Yet, while the aluminium consumption in the region is due to grow by 7.7% p.a. between 2012 and 2016, production is estimated to grow at 8.6% p.a. producing an increasing surplus, which, according to Rusal's estimates, will reach more than 3.0 million tonnes by 2016. Suppressed aluminium LME prices, increased prices for natural gas and restricted bauxite and alumina resources are the major challenges GCC producers will have to tackle to secure their future prosperity.
According to Mr Mukhamedshin, large bauxite reserves and spare alumina capacity could make UC Rusal a partner of choice for GCC producers as they seek to address the challenge of cost-effective supply of raw materials to underpin their production growth.
"The region relies on alumina import and therefore remains exposed to external market conditions. Rusal has strong positions in both bauxite and alumina that could offer scope for mutual interest partnerships that would strengthen the Gulf producers' competitiveness and secure their future resources requirements," said Oleg Mukhamedshin, UC Rusal's Deputy CEO and Director for Strategy and Business Development.
"Overall, the world needs a competitive market for aluminium where prices are kept at reasonable levels for consumers by competition and efficiency and where competition pushes us towards new energy-efficient technologies. An open dialogue is critical for future health of the sector. Arabal 2012 is an important initiative from the Gulf Aluminium Council and I welcome the opportunity to discuss how we can work together in future to realise the potential of the global industry," he added.
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