Representatives for the major producers in the GCC area said in a panel held at the Arabal 2018 conference in Kuwait City on Monday November 12 that their businesses are not feeling any ill effects from shipping prime aluminium to the US even though none of the countries are among those exempt from the 10% Section 232 import tariff.

“US customers are taking the brunt [of the tariffs] today,” Emirates Global Aluminium (EGA) executive vice president of midstream and technology development and transfer Ali Al Zarouni said.

Despite the implementation of the Section 232 tariffs, the US remains “the most attractive market for us,” Qatar Aluminium Ltd chief financial officer Ahmad Al-Khudairi said.

US imports of unwrought aluminium from Qatar hit 16,878 tonnes in September, the highest level thus far this year. But US imports of the product overall continue to be down this year, due largely to the combination of the Sectuion 232 tariffs and sanctions placed on major importer UC Rusal Plc.

The GCC aluminium executives who spoke on the panel were skeptical of the US industry’s ability to take advantage of the tariffs, outside of reaping sales using an exponentially higher US aluminium premium this year.

Fastmarkets AMM assessed the Midwest P1020 premium at 19.25-19.75 cents per lb on November 9, unchanged since October 26 but up from 9.4-9.5 cents per lb at the start of this year.

“I think it’s very difficult for a US smelter to restart again,” Aluminium Bahrain deputy chief executive officer and chief supply chain officer Ali Al-Baqali said. 

“Unless you address the problem of energy and long-term price stability, you cannot have a long-term restart,” Al Zarouni said.

High electricity costs have long been an issue for US smelters trying to stay afloat, and US industrial power rates have been rising for the past few years. Aluminium smelters' intense 24-hour-per-day power usage means high power costs are crippling their bid to be competitive, especially when smelters in the GCC enjoy far cheaper rates.

But the news isn’t entirely rosy for producers in the Middle East.

Al Zarouni confirmed during the panel discussion that EGA is operating its smelters above the rated capacity, which other speakers at the conference said could drag on growth prospects in the region during the coming years.

EGA in February reported that primary aluminium production rose to a record 2.6 million tonnes in 2017, a 4% increase from the previous year.