Alba of Bahrain Sees Aluminum Demand Rising on Mideast Projects
Aluminium Bahrain BSC expects demand for the metal to increase this year as Saudi Arabia and other Middle Eastern countries spend more on housing, while sales will also rise in North America.
“The physical demand this year looks healthy,” Chief Executive Officer Tim Murray said today on a conference call. Aluminum prices on the London Metal Exchange may average $2,000 in the first six months of 2013 and rise as high as $2,200 in second half, according to the state-run company known as Alba.
The Persian Gulf metals producer is moving ahead with a planned $2.5 billion expansion to add a sixth pot line, or production facility. A feasibility study for the project will be completed in the third quarter, Murray said. Sovereign wealth fund Bahrain Mumtalakat Holding Co. holds a 69 percent stake.
“Financing appetite for pot line six looks good from international banks,” he said. Alba hired BNP Paribas SA as an adviser to assess the company’s financing options for expanding its smelter.
Aluminum smelters burn natural gas, and Bahrain’s government has yet to allocate supply for Alba’s planned expansion. With its gas reserves declining, the island kingdom is considering importing liquefied natural gas to help meet local demand.
Alba, which buys all its gas from the government at a fixed price, doesn’t yet know what it will have to pay this year, Murray said, without elaborating on the price it pays now.
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