Middle East magnet

The Middle East is becoming an ever-increasing power in primary aluminium, thanks to governments that are eager to diversify from their predominantly oil- and gas-based economies. Of all the countries in the region, only Saudi Arabia (and to a lesser extent, Iran) has extensive reserves of bauxite, but production of energy-intensive primary aluminium makes sense where there is an assured and stable power supply. Moreover, either the energy itself or the fuels needed for dedicated power stations are often supplied at favourable long-term rates. This tends to offset the fact that capital costs of new construction in areas such as the Gulf are high. Global first-half primary aluminium consumption fell 14.9% year-on-year to 16.4m tonnes, while in response, primary production was cut 11.7% to 17.7m tonnes, according to UK-based WBMS (see tables). The big players in the region, however, are looking well beyond the current recession to a time when...