Interview: Ali Al Baqali
In which ways has the global aluminium market responded to growing trade tensions?
ALI AL BAQALI: Global economic conditions continued to weaken in 2019: US-China trade tensions and sanctions and geopolitical events have taken their toll on investors and have added to a downbeat commodities market. Aluminium metal was no exception – the downbeat market sentiment and weak economic activity across global markets have contributed to a slowdown in the growth of demand – the first drop since the recession in 2009. On the supply front, world production inched down by 1% year-on-year (y-o-y) despite the growth gained in North America after a lacklustre 2018.
Global slowdown coupled with weak economic activity weighed on London Metal Exchange (LME) prices – the LME price fell from approximately $2100 in 2018 to $1700 in 2019, leading to heavy losses and a loss of confidence in the trade. Market analysis is now forecasting that global aluminium consumption will increase at a slow pace, within the range of 3-3.5% y-o-y for the next few years, and will be mainly driven by the growth of the Asian market. Despite good fundamentals, the LME price traded at the lower range in 2019 owing to weak economic activity.
How likely is it that the automobile trend towards aluminium will continue, and what does this mean for the wider aluminium market?
AL BAQALI: The automotive market, particularly light trucks, sport utility vehicles and electric vehicles, continues to experience steady growth. Aluminium is a growing material of choice for the automotive industry worldwide as it delivers industry superior performance, fuel efficiency, high safety and convenience, as well as excellent recycling opportunities, making the metal a sustainable choice. The transition from steel to lightweight aluminium vehicles will continue to drive aluminium demand in the coming years.
To what extent will the export portfolio further diversify in line with the Line 6 expansion project?
AL BAQALI: With Line 6 adding capacity of 540,000 tonnes per annum, Alba is well positioned to meet global demand, which is projected to reach $249bn by 2025. We aim to grow our sales in the US market from 10% to 15% with Line 6, as netbacks are more attractive when compared to other markets. With the Automotive Quality Management System - IATF 16949: 2016 Standard Certification, we are at an advantage to penetrate automotive markets through our rolling slabs and further our market share in Europe and Asia. Alba will also increase metal supply to Bahrain’s downstream cluster as well as other MENA countries due to the booming infrastructure and construction activities in the region.
What were the main obstacles in establishing the region’s first spent pot lining (SPL) treatment plant, and are other initiatives likely to follow?
AL BAQALI: Our commitment to safety and environmental sustainability will always be one of our key objectives. Alba is developing a value-creating and environmentally friendly solution for the treatment of SPL – the first plant of its kind in the GCC and Bahrain – in collaboration with Bahrain’s Supreme Council for Environment (SCE). The SPL treatment plant is expected to be operational by the first quarter of 2021, and will have the capacity to treat 25,000-30,000 tonnes of SPL per year, which, after being processed, can be used in other industries.
Government support is one of the key factors in developing large-scale projects such as this and we are thankful for the SCE’s guidance in making this project a reality. Alba is at the forefront of sustainable development and adopting international best practices. We are happy to share our knowledge and experience with our peers, as we have a collective responsibility towards society and the environment.
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