Aluminium extended declines on Thursday after a major Middle Eastern producer announced plans to restore production at a war-damaged smelter sooner than expected.
Emirates Global Aluminium (EGA) says its Al Taweelah smelter in Abu Dhabi, which was significantly damaged by a missile strike in March, is expected to return to pre-war production levels in early 2027.
The facility resumed operations in May and is currently running at around 18% capacity. At the time of the restart, EGA expected a return to full capacity to take about a year.
The company is now accelerating that timeline, allocating approximately US$400 million ($566 million) in capital spending to the Al Taweelah recovery program.
“Hot metal production is expected to reach pre-incident levels in Q1 2027,” EGA said in its latest earnings release.
Elsewhere, EGA remains on track to break ground on a major aluminium plant in Inola, Oklahoma, by the end of this year.
The project, a joint venture with Century Aluminum (NASDAQ:CENX), is expected to become the largest primary aluminium production facility in the US and the country’s first new primary smelter in decades.
Prices retreat
Aluminium prices extended losses following EGA’s update, falling almost 2% towards US$3,300 per tonne on the London Metal Exchange (LME) after reaching a near two-month high earlier this week.
The earlier rally followed Norsk Hydro’s (OL:NHY) announcement that it would temporarily cut production by 50% at its Alunorte refinery in Brazil, one of the world’s largest single-site alumina refineries.
That disruption added to existing supply concerns caused by the Middle East war. The Gulf region accounts for about 10% of global aluminium production, with the conflict disrupting metal flows from the region.
Those concerns previously pushed aluminium prices to a two-year high in June, but EGA’s accelerated recovery timeline has eased some of the pressure on the supply outlook.
Write to Jackson Chen at Mining.com.au
Image: Emirates Global Aluminium
