DURING the last day of Arab International Aluminum Conference “Arabal 2012”, Eric Zhang, analyst at SMM, presented on the peculiarities of the Chinese industry, which persists with enormous production despite heavily subsidized losses – in certain provinces in particular. He forecast that China's domestic aluminum prices will face many uncertainties in 2013 and are subject to LME aluminum prices to a large extent. SMM expects domestic aluminum prices to fluctuate between RMB 15,000-17,500/mt in 2013. Senior executives from Qatalum, Ma'aden, Soahr Aluminium, Dubal, Emal, Hydro, and other firms took part in panels, workshops and presentations – making the future of GCC aluminum the main focus of the conference, through its relationship with the rest of the global industry and the macro economy. The role of China was a theme carried into the next session, with a presentation by Jorge Vazquez, Managing Director of Harbor Aluminum Intelligence, who spoke to delegates on who is winning and losing in the global aluminum industry and supply chain today. “Who is getting the value?” he asked. “It is not the producer for sure”. Today, consumers are getting great value ever, with a graph of real LME aluminum prices at a cycle bottom below $2,000/mton, compared to historical average of $2,650, and a high of about $4,700. He forecast two main sources of growth in next five years: Emerging Asia – including the Gulf – and the Americas. Over 16 million tons of new aluminum capacity should hit the market by 2015, two thirds of this in China for domestic consumption. The Middle East too is well placed. “We see the Middle East as the leading provider for growing world metal needs ahead and Americas/Europe/South East Asia as increasing import players”. David Cutting, Director of J.D. Power Automotive Forecasting, spoke about the Global Light Vehicle Market – heavily dependent on aluminum – saying it has come a long way. In, 2012, global light vehicle sales are holding in positive territory, while in 2013, global light vehicle growth is forecast to be steady with moderate risk. If there is one trend in the global automotive industry besides platform consolidation, however, it is uncertainty, Cutting said. The GLV market is predicted to break through the 100 million barrier by mid-decade, almost doubling in size since the end of the 1990s. Emerging markets, led by China, India, Brazil and Russia, have driven much of the recent growth and are expected to remain key drivers to future growth. Light vehicle production growth in Asia is expected to significantly outpace the other regions (with share of output increasing from 48 percent in 2011 to 53 percent by 2016). “Scale brings fragmentation and a new definition of platform”, he said, pointing to how platforms have changed beyond recognition in the last 20 years. Shambhu Prasad, senior expert at Gulf Organization for Industrial Consulting, noted that Aluminum usage has increased to 140 kg/car in 2011 - predominantly in drivetrain, chassis and suspension and body. The automotive industry is the largest market for aluminum castings, and these account for more than 50 percent of aluminum used in cars. “Sustainability is transition, from short term to long term thinking, from a linear flow of resources to a systems' flow, from fossil fuels to integration of alternatives, and seeing environmental, social and economic challenges as not separate and completing, but as interconnected and complementary,” said Dr. Mufeed Odeh, Sustainability Manager at Qatalum. “Our strategy is to reduce, reuse and recycle”, he said, emphasizing tight controls on processed water, green surroundings, controls on emissions, all in line with the Qatar National Vision 2030 pillars – which emphasize social and environmental development too. — SG
