Aluminium in Iran – can the potential be realised? – by Ken Stanford (Aluminum Insider – November 18, 2016)

Following the relaxation of sanctions, Iran, which has for many years been marred by political issues and civil unrest now has plans for fresh development of its infrastructure and industry – and the country’s aluminium sector in particular has been targeted for key support. However, the prospects for realising the considerable potential will be impacted by various challenges.

Aluminium is the world’s fastest growing industrial metal and Iran has the potential to be a major player in this accelerating, profitable sector, according to a recent presentation made in Iran by the London-based Commodities Research Unit Group (CRU). CRU’s raw materials expert, Michael Insulan, was speaking at a seminar staged at the Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO), headquartered in Tehran.

According to Insulan, demand for aluminium has been growing at a fast pace. In order to consider Iran’s potential, it is useful to take a look at the regional and global context. The metal recorded a nearly 6% compound annual demand growth rate for the 2000-15 period – even topping iron ore, the global commodity market’s most sought-after material.

Insulan believes aluminium will continue this global trend up until 2020, with the transportation sector acting as the main driver for growth for the metal. Iran is well positioned to capitalise of this development.

As far as the Middle East region is concerned, its aluminium producers have grown from minor players to global majors in less than 15 years. The United Arab Emirates, Bahrain, Saudi Arabia, Qatar, Oman, Iran and Turkey combined, currently account for close to 22% of the world aluminium output, spiralling up from less than 6% in 2000.

The regional producers enjoy lower energy costs compared to the global average, further supporting their competitive advantage.

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