Electricity costs give Middle East producers the advantage, Vazquez said last week in Dubai.

"Demand in the U.S. is growing but at the same time production is declining, and declining in a significant way," he said. "It's opening an interesting opportunity for vendors outside the U.S."

Middle East shipments of value-added aluminum parts to the U.S. in the first nine months of this year rose 50 percent to about 734,000 metric tons, or 60 percent of the total, Vazquez said. The cash cost of production in the Middle East was $1,200 a ton in the third quarter, compared with $1,670 a ton in the U.S., he said.

The Middle East aluminum industry started from one smelter in Bahrain in 1971 producing 120,000 metric tons a year to today’s six smelters in Saudi Arabia, United Arab Emirates, Oman, Bahrain and Qatar with output of about 5.2 million tons last year, according to Emirates Global Aluminium. Alcoa Inc. split into two companies as of Nov. 1 after shutting unprofitable smelters and cutting production.

Read Full Article