Emirates Global Aluminium has moved to sell large volumes of alumina — the key raw material needed to make aluminum — following a strike on a smelter it runs on the outskirts of Abu Dhabi, according to people familiar with the matter.
EGA this week offered to sell several alumina cargoes shipping April to June, the people said, asking not to be identified discussing commercial matters. The prospective sales come after the firm said attacks on Saturday caused “significant” damage to its Al Taweelah smelter, one of the world’s largest.
The company said Wednesday it couldn’t immediately comment.
EGA has been carrying out damage assessments at the site, but aluminum prices have already rallied sharply since the weekend, when another major plant run by Aluminium Bahrain was also targeted by Iran. The attacks have created fresh risks to supply in the region, adding to production cuts at smelters that are facing shortages of raw materials flowing through the Strait of Hormuz.
Aluminum is the most ubiquitous industrial metal after steel, but in recent years the industry has faced several disruptions in a complex global supply chain that involves mining raw bauxite ores, refining them into alumina and then smelting that into finished metal. While EGA can produce some alumina itself, it’s typically a large buyer of the material, bringing in additional cargoes through the strait to feed Al Taweelah and a second smelter in Dubai.
As the market awaits details of the severity of the strikes, some analysts have warned that EGA’s confirmation of significant damage indicates the plant may have undergone an uncontrolled shutdown, causing metal to solidify in its smelting circuits. Making repairs in such circumstances is costly and time-consuming, with Natixis SA analysts estimating it could take more than a year.
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