Industry

Qatar’s new aluminum smelter eyes peak output on back of stable prices

With global aluminum prices expected to hold at the US$2,000 (AED7,346) a ton-plus level through the year, Qatar’s newly commissioned giant smelter is aiming to make a perfect pitch. It was last month that the US$5.7 billion Qatalum plant was formally commissioned with an annual installed capacity of 585,000 metric tons of premium quality aluminum ingots. Since then, shipments have already been made to clients in Europe, Southern Asia and the Far East, as well as to Saudi Arabia. In fact, Qatalum, which expects to touch peak production before the year is out, sees a significant buildup in its prospects among a regional clientele over the medium term. Certainly, the growth of regional markets especially in the construction industry is fuelling and increasing the appetite for aluminum, said Jan-Arve Haughan, Qatalum Chief Executive Officer. “If the demand exists in Qatar, Qatalum, with the strategic help of our partners Qatar Petroleum and Hydro, could meet that demand as we are ideally located to do so. Infrastructure-led project activity continues to tick along nicely in Qatar and much the same can be said about Saudi Arabia,” he continued.

Gulf finance ministers agree to scrap import duty on steel, cement

Finance ministers from the six-nation Gulf Cooperation Council, or GCC, agreed in early May to abolish a 5 per cent duty on steel and cement imports, Saudi press reported, citing the bloc's Secretary General Abdulrahamn al-Attiyah. He did not clarify when the abolition is expected to be implemented. The GCC is a loose political and economic alliance of Gulf oil-producing nations--Saudi Arabia, the United Arab Emirates, Oman, Qatar, Bahrain and Kuwait. Saudi Arabia, which came under pressure recently to lift duty on steel imports to ease the recent price hikes that triggered panic buying, said last month it cannot lift the customs duty on the metal imports without the consensus of the five other GCC states. In March, the trade ministry of the Arab world's largest economy added for the first time the local selling prices for all imported steel to its steel price index on its website. The index sets the rates for 16 cities with different prices for the producers in each city. The ministry also warned that it will take punitive measures against firms and traders that don't abide by its rates or refuse to sell to customers. In 2008, Saudi Arabia, which has a manufacturing capacity of 8.4 million tons per year, imposed a ban on steel exports to protect local markets as domestic prices of the metal almost doubled. In the five years to 2013, the kingdom, fueled by reserves accumulated from oil exports, will spend $400 billion from oil revenue to develop infrastructure as well as build new schools, railways and universities.

Indian steel maker aborts US$500m Oman deal with UAE firm

Indian steel maker Jindal Steel and Power's has ended talks with UAE-based Al Ghaith Holdings to buy its assets in Oman. The US$500 million buyout was aborted due to issues over title ownership. "JSPL confirms that it has discontinued discussion with Al Ghaith Holdings of UAE for acquisition of Shadeed Iron and Steel (Shadeed), the 1.5 MT Hot Briquetted Iron (HBI) facility located in Sohar, Oman," the company said in a statement. An Indian news agency reported that ambiguity over a land title ownership issue, due to existing transactions with a British Virgin Islands company, was also an issue in the aborting of the talks. "(There was) no clarity over the land title due to breach of the agreement with Sohar port authority," JSPL's statement added.

Qatar could strengthen ties to Volkswagen

Qatar, which controls 17 per cent of the votes in Volkswagen, is considering teaming up with Europe's largest carmaker for joint investments in the auto industry, according to a German magazine. "We can help VW to expand, we could even create companies together," said Hussain Ali Al-Abdulla, Vice Chairman of Qatar Holding and a member of the VW supervisory board, in an interview with German business magazine, Capital. The Qatari executive signaled his country, too, would look to play a much more visible role than sovereign wealth funds from the Gulf have in the past in Germany. Abu Dhabi-based Aabar, which belongs to the emirate's IPIC wealth fund, started the trend ever since it took a 9.1 per cent stake in Daimler. He suggested the Gulf state could also support it in any efforts to expand VW's control over Suzuki. "We could for example buy a stake equal to the 20 per cent that Volkswagen owns and then control this firm together," he said. When asked to elaborate, the Qatari said: "Oh, I am only thinking out loud." The chief executive of family-controlled Suzuki, Osamu Suzuki, has been quick to say quash speculation that he would support VW purchasing more shares and denied that the Japanese carmaker was now the 11th horse in Volkswagen's stable of brands. Qatar Holding's Al-Abdulla also told Capital he would be a very active member of the board, and sharply criticized the German carmaker's lack of share in the United States.

Good steel cluster potential in Oman's Sohar Free Zone

Oman's Freezone Sohar, a new growth engine taking shape alongside the Port of Sohar, is well positioned to attract investments in a major downstream steel cluster, according to a senior representative of the free zone authority. Jamal T Aziz, Deputy CEO of the Port of Sohar and chief operations officer of Sohar Freezone LLC, is optimistic about prospects for the establishment of a downstream cluster anchored by upstream steel projects located at the industrial port next door. The free zone's proximity to the steel mill of Shadeed Iron and Steel, and the pelletizing plant of Brazilian mining giant Vale, augur well for the development of a downstream steel cluster, Jamal said. "All the ingredients are there that make a downstream steel cluster an attractive proposition raw material, feedstock, deepwater port, connectivity to regional markets, a workforce that can be trained, and so on. A downstream steel cluster is one of our high priority projects that we want to see in the free zone," Jamal stated. Shadeed's US$700 million steel mill is substantially complete and is likely to be launched before the year-end, once an agreement over its acquisition by another steelmaker is finalized. Vale is also scheduled to bring into production later this year its US$1.4 billion iron ore pelletizing plant the largest of its kind in the Middle East. Both ventures will create synergies that make downstream steel-related investment in the nearby free zone eminently attractive. Sohar, says Jamal, is well placed to meet demand for steel products in a region where demand has traditionally lagged supply.