The UAE's aluminium producers are reporting soaring demand as the United States returns to stronger growth. The price of the metal which fell for much of last year has risen 11.1% since the start of the year to USD 2,245 per tonne.
Emirates Aluminium is expecting strong growth from the US to drive sales in the year ahead as the world's largest economy shows strong signs of recovery.
Mr Saeed Fadhel Al Mazrooei president and CEO of Emal said that the aluminium smelter known as Emal and based in Abu Dhabi expects sales to the US to more than double from 100,000 tonnes last year to 250,000 tonnes this year. The orders on our metals have increased because one of our prime products is for automotives. The company hoped to capitalize on surging demand for trucks. The demand was leading the smelter to boost its production capacity.
Mr Al Mazrooei said that "I have my order book of 900,000 tonnes. I can only produce 750,000 tonnes.”
Emal is JV between Dubai Aluminium and Mubadala Development, a strategic investment company owned by the Abu Dhabi Government. Dubal reported full year net profit of AED 3.52 billion an increase of 65.2% on the previous year.
The company said that the results reflect a combination of higher production and sales volumes plus the benefit of higher aluminium prices, coupled with sustained focus on controlling the cash conversion cost.
The statement said that sales grew by 29% to AED 11.14 billion. Elsewhere in the region, Aluminium Bahrain has lagged with the company's shares falling 10.1% since the start of the year to BHD 0.575 as a bribery scandal swirled. But with a price to earnings ratio of 3.8, the stock looks extremely cheap especially with a yield approaching 7%.
But the growth in orders for UAE aluminium comes alongside indications of decelerating growth in China, the world's biggest car market and a major importer of industrial commodities. Whether strong US demand can compensate remains to be seen.
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