Aluminium Bahrain has reported third-quarter losses on increased natural gas prices and falling metal prices.
Fall in metal prices takes toll on Bahrain's Alba
Aluminium Bahrain (Alba) has reported third-quarter losses on increased natural gas prices and falling metal prices.
Net losses stood at US$35 million (Dh128.5m), compared with a net profit of $214m a year earlier.
Prices for the metal declined by 24 per cent to $1,922 per tonne in the quarter, said Alba. Even as consumption worldwide increased by 3.9 per cent in this period, it added, production declined by 2.4 per cent.
"Despite the low LME [London Metal Exchange] levels, Alba was able to still generate free cash flow while the majority of the world's smelters are operating cash negative," said Tim Murray, the company's chief executive.
Alba is suffering from a lack of domestic gas production in Bahrain, which forces the kingdom to rely on more expensive gas from elsewhere.
Natural gas - an important ingredient in aluminium production - is abundant in the Arabian Gulf. But a surge in demand because of increasing urbanisation and industrialisation has created a shortfall in most GCC countries, and governments with reserves under their control are tapping additional sources.
Alcoa, the third-largest producer of aluminium in the world, also revised its demand expectations because of slacking demand from China.