ABU DHABI, Nov 6 (Reuters) - Emirates Aluminium (Emal) is ahead of schedule with the expansion of its production capacity to 1.3 million tonnes a year and expects to complete the project in mid-2014, the company’s chief executive said on Wednesday.
Emal’s $4 billion project to boost capacity from about 800,000 tonnes a year had been expected to be completed by the end of 2014.
“We are three months ahead of schedule on that,” CEO Saeed al-Mazrooei told reporters on the sidelines of a conference in Abu Dhabi, adding that he expects strengthening global demand to absorb the company’s increased output.
Canadian engineering contractor SNC-Lavalin said in September that it had achieved the first hot-metal production from the expanded facility nearly three months ahead of schedule.
Mazrooei said that Emal’s production could rise to 810,000 tonnes for 2013 before hitting 1.3 million tonnes next year.
Analysts polled by Reuters last month see the aluminium market remaining oversupplied by about 600,000 tonnes next year, against the 1 million tonnes forecast in a previous poll.
Although benchmark London Metal Exchange aluminium is trading around $1,828 a tonne, Emal is selling at an average price of about $2,200.
“The premium is good,” Mazrooei said, referring to the amount paid above LME prices to withdraw physical aluminium from warehouses registered by the exchange. “The LME is low. It is healthy for us.”
Aluminium premiums climbed nearly 5 percent last month, while benchmark aluminium on the LME fell by about 1 percent. Producers rely on a high premium to remain profitable, especially in an oversupplied market.
Emal is one of the United Arab Emirates’ two flagship aluminium businesses - alongside Dubai Aluminium - that are to merge to create the world’s fifth-largest aluminium company with an enterprise value of $15 billion.