Participating in panel discussions at the second day of the Arab International Aluminium Conference (ARABAL) 2017, industry executives expressed confidence that recent rally in the metal prices could sustain in the long term.
The GCC construction sector, that consumes aluminium produced in the region, witnessed a weakness in activities due to lower oil prices in past few years which raised concerns about demand for metals such as aluminium.
The Middle East region accounts for nearly ten per cent of total global aluminium output as abundant energy supply makes it easier for regional smelters to import raw material and process it into finished products.
“We have all the components, we have the government support, and what we need now is to do some research and development to look for new industries where aluminium could be used,” said Ihab Mouallem, CEO of National Aluminium Products Co.
He said the construction sector accounts for a lion’s share in aluminium consumption in the region, but industrial segment could be another important area going forward as currently it accounts for only two per cent.
“There is a big potential for everybody in industrial segment,” Mouallem added.
Said al Masoudi, CEO of Sohar Aluminium, said he doesn’t expect a decline in aluminium demand going forward and expects prices to remain strong despite reports of capacity increases in India and China.
Industry leaders believe that electric vehicles, which account for less than two per cent of global auto sales, could provide a much needed boost to aluminium demand in future.
Najla Zuhair al Jamali, executive managing director of Takamul Investment Co, which invests in smelters and other metal segments, said electric vehicle sales are likely to double every year going forward.
“And this could boost demand for aluminium products as automakers would look at building lighter and more fuel efficient cars. Moreover, it would also boost demand for electrical aluminium segments and cables that would ensure strong demand for the metal would continue in future.”