Smelters in the Middle East sweat over aluminium as their cargoes are held up
Analysts say that disruptions to the marine traffic in the Middle East Gulf could prevent the region's aluminium smelters not only from exporting their metal but also from receiving the raw materials needed to continue producing metal.
Gulf Cooperation Council nations produce around 8% of all aluminium in the world. Their smelters depend on alumina imported via the Strait of Hormuz for the production of primary metal. This supply line is now frozen, as vessels avoid the strait after the U.S. and Israeli attacks on Iran.
Ben?Ayre is a lead metals analyst for shipping data provider Kpler. He said that 407,000 metric tonnes of alumina are on the water, en route to smelters in the region. Only 61,000 tons of that total have made it to the Mideast Gulf according to?Ayre. He added that most of the material is from Australia.
He said that the company's Dubal Smelter, located in the United Arab Emirates (UAE), Aluminium Bahrain, and Qatalum - a joint venture of Qatar Aluminium Manufacturing Co. and Norsk Hydro - were all potential destinations.
Paul Adkins of the aluminium consultancy AZ Global estimated that smelter alumina stocks would be high for four to eight weeks.
A spokesperson for Hydro said that the company is evaluating measures to ensure continuity of raw material deliveries to its Qatari Smelter.
The spokesperson added that "Qatalum is stocking supplies on site so there aren't any immediate effects."
Kpler's Ayre estimated that 545,000 tons of bauxite, an ore refined to make alumina, were on the water headed for EGA's Al Taweelah refinery. This is the only bauxite buyer in the region.
He added that just under half of this, 263,000 tonnes, had already crossed the Strait of Hormuz and were in the Mideast Gulf.
Ayre stated that a vessel believed to be carrying Al Taweelah’s first bauxite shipment from Sierra Leone was heading for the UAE when the attacks began on Saturday morning. However, the vessel has now anchored in the Gulf of Oman.
EGA did respond immediately to a comment request. (Reporting and editing by Jan Harvey; Additional reporting by Polina Duan, Tom Daly, and Dylan Duan)
(source: Reuters)
