Aluminium producers from the GCC are anticipated to increase exports to the US and European markets following the US and UK’s prohibition on trading Russian aluminium, copper, and nickel on global metal exchanges, and their importation into the US, analysts and company executives have stated.
The GCC region is a significant producer of primary aluminium, with a total production of 6.08 million tonnes in 2023, representing approximately 9 per cent of the global production. The UAE accounts for 44 per cent of the total GCC production.
The UAE ranks fifth globally in aluminium production, followed by Bahrain in sixth position, according to CRU Group, a London-based commodities research firm.
Zaid Aljanabi, a principal analyst at CRU covering primary and secondary aluminium, stated that there are more opportunities for GCC producers to expand their market share with the diversion of metal away from Western Europe and the US amid the new sanctions.
US, UK Introduce Metal Export Restrictions Amid Ukraine Conflict
Earlier this month, the US Treasury Department, in collaboration with the UK, introduced two new prohibitions to restrict Russia’s revenue from aluminium, copper, and nickel exports amid its ongoing invasion of Ukraine.
As part of these measures, the US banned the import of Russian aluminium, copper, and nickel produced on or after April 13, and limited the trade of these metals on global exchanges such as the London Metal Exchange and the Chicago Mercantile Exchange.
Russian aluminium exports were declining even before the imposition of sanctions by the US and the UK, according to Mr Aljanabi. Meanwhile, exports from the UAE and Bahrain increased by 26 per cent and 15 per cent, respectively, during the same period.
Aluminium producers such as Ducab Metals Business in the UAE and Aluminium Bahrain are optimistic about increased demand following the latest move by global powers.
Mohamed Al Ahmedi, the chief executive of Ducab Metals Business, stated that the withdrawal of Russian aluminium from the market would boost their supply to the global market. Ducab Metals Business recently acquired GIC Magnet, a Dubai-based manufacturer of copper and aluminium strips, aiming to enhance its supply in global markets.
Aluminium Bahrain’s chief executive, Ali Al Baqali, expressed optimism about growth prospects and aims to increase the supply of aluminium products to the US and other markets. He noted that the recent US sanctions on Russian aluminium have led to a shift in the global aluminium landscape, presenting a potential opportunity for Aluminium Bahrain to strengthen its role in the global aluminium supply chain.
Ducab Metals also aims to capitalise on new opportunities in global markets as the UAE continues to strengthen trade ties with countries worldwide through comprehensive economic partnership agreements.
