Profits soar at Aughinish rival Emirates Aluminium as prices of the metal climb

The rival to Russia's Rusal said profit rose almost fourfold to €1.6bn

Tue, 23 Aug, 2022 - 16:26

Emirates Global Aluminium, a rival to Russia's Rusal which owns the huge smelter plant in the Shannon Estuary, posted a record first-half profit as prices of the metal soared.

Profit rose almost fourfold to €1.6bn, the Middle East’s biggest aluminium producer said. That exceeded the profit the firm reported for the whole of last year, as revenue jumped about 70%.

Aluminium, used in everything from beer cans to plane parts, averaged about 36% higher on global markets over the first half of the year after Russia’s invasion of Ukraine. Prices have since dropped from the highs reached in March, with aluminium trading at $2,394 a ton on the London Metal Exchange, and Emirates Global warned of tougher conditions.

“We expect the market conditions to be more challenging the second half of the year,” said chief executive Abdulnasser bin Kalban. “We remain well on the course for a strong and incredible year overall.”

Aluminium will likely average less than $3,000 a ton for the second half, Emirates Global said. Over the next 12 months, the company will be watching global demand, China’s exit from restrictive coronavirus policies, and soaring energy prices for their impact on the market.

“We do expect this to be a story of two halves,” the company said. “The economic outlook is uncertain and prices have come down.”

At current prices, about 20% of global aluminium production is unprofitable, said En+ Group, the parent company of Russian aluminium giant Rusal, earlier this month.

In that earnings statement, Rusal, which owns the huge alumina smelter Aughinish in the Shannon Estuary, had said that "for the time being" it was delivering on its global contracts as it struggles with the fallout from Western sanctions on Russia.

It employs around 500 people at the Co Limerick smelter and is the one manufacturing site on Irish soil whose workers potentially have the most to lose from the sanctions regime and soaring energy costs since Russia invaded Ukraine in February.

Auginish is one part of Rusal's international operations that employ 59,500 people in Russia, Ukraine, Guinea, Jamaica, Italy, Sweden, and many other locations. Rusal produces the compound alumina from bauxite mines and makes aluminium used by car makers and in construction, as well as related products, such as tin foil, for global markets.