DAMMAM: Gulf aluminum companies are maintaining normal production levels despite escalating geopolitical tensions in the region but have temporarily begun stockpiling part of their output in anticipation of export challenges and rising logistics costs.
These volumes will be released back into the market once visibility improves and conditions stabilize, Mahmoud Al-Dailami, secretary general of the Gulf Aluminium Council, told Al-Eqtisadiah.
Al-Dailami said the current challenges are not related to the operational capacity of Gulf smelters, but rather to securing supply chains for raw materials, as several producers rely on imported inputs.
He noted that tensions in key maritime corridors, particularly the Strait of Hormuz, could lead to noticeable shortages of raw materials due to navigation difficulties, in addition to higher freight rates and insurance premiums.
He pointed out that Gulf aluminum producers manufacture an average of about 17,800 metric tonnes per day, totaling roughly 6.5 million tonnes annually. This, he added, represents around 10 percent of global production of approximately 64 million tonnes.
