Top Mideast Aluminum Maker Says Prices Remain Under Pressure

Anthony Di Paola
·2 min read

(Bloomberg) --

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The biggest aluminum producer in the Middle East said prices for the metal would remain under pressure because of the global economic slowdown.

Emirates Global Aluminium PJSC’s net income rose 34% to a record $2 billion in 2022. The performance of the company, whose shareholders are considering an initial public offering, was bolstered by a surge in commodity prices after Russia’s invasion of Ukraine early in the year and slowed in the second half.

Aluminum, used in everything from beer cans to plane parts, reached an all-time high of more than $4,000 a ton in London following Moscow’s attack. It’s since fallen to $2,375, with sales slumping as central banks raised interest rates to combat inflation.

“The more difficult conditions in the second half of 2022 continue into 2023,” Chief Executive Officer Abdulnasser bin Kalban said in an interview.

Demand is set to rise 1% to 2% in 2023, Chief Financial Officer Zouhir Regragui said in a statement.

Green Boost

But EGA is confident it will accelerate in the coming decades as companies increasingly turn to the light and easily-recyclable metal for use in energy-transition projects.

Aluminum will be one of the metals that sees the highest demand growth as countries try to neutralize carbon emissions by 2050 and building more electric vehicles and solar panels, according to BNEF.

“Eventually we need to grow” to meet higher demand, bin Kalban said.

EGA is equally owned by two sovereign wealth funds — Investment Corp. of Dubai and Abu Dhabi’s Mubadala Investment Co. The share sale could take place as early as the third quarter, Mubadala’s CEO, Khaldoon Al Mubarak, said in January.

As soon as EGA’s owners decide to go ahead with the share sale, Bin Kalban said, “we’ll hit the button and we are good to go.”

(Updates with executive comments from third paragraph.)

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