Strong aluminium prices push Alba profit up

Alba

• Profits up $247m
• Revenues down $42m
• Inflation clouds outlook

Aluminium Bahrain, better known as Alba, reported profit for the first half of 2024 of BD93 million ($247 million), an increase of 83 percent year on year, helped by the falling cost of raw materials and rising sale prices.

Alba’s profits in the second quarter surged even higher, jumping 102 percent year on year to $182 million.

Aluminium prices on the London Metal Exchange rose 8 percent quarter on quarter during the period.

The profit surge during the first six months of 2024 was despite total revenue for the period dropping 2 percent.

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Alba, one of the largest aluminium smelters in the world, sells roughly a quarter of its aluminium within Bahrain itself. A quarter goes to Europe, around 15 percent each is sold in the Americas and China and around 20 percent in the wider Middle East.

Demand for aluminium has dropped in Europe by 4 percent and by 1 percent in the US, the company reported. 

In China and the Middle East modest growth has bolstered total demand. The global aluminium market faces a series of macroeconomic challenges, including geopolitical tensions and stubborn global inflation. 

US and UK sanctions on Russia have led to large and growing stockpiles of sanctioned aluminium, complicating the market for producers.

“The current market outlook revolves around two factors: one is interest rates and the other is uncertainty,” Ali Al Baqali, CEO of Alba, said.

In March Emirates Global Aluminium (EGA), the UAE’s largest non-oil industrial company and one of the world’s largest aluminium producers, reported a decline in net profit last year, despite posting record production volumes of alumina, cast and hot metal for 2023.

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Net profit fell 54 percent year on year against a backdrop of lower benchmark prices for aluminium.

EGA’s revenue also declined to $8 billion for 2023, from $9.4 billion in 2022.

Abdulnasser Bin Kalban, chief executive of EGA, said that the long term outlook for aluminium is positive, as the metal is essential for developing the country’s sustainability goals.

“Global aluminium demand is expected to grow significantly over the coming decades, particularly for low carbon and recycled metal,” he said.