Dubai Aluminium Says Orders Fell 30% in First Quarter

May 11 (Bloomberg) -- Dubai Aluminium Co., the largest smelter in the Middle East, said orders fell 30 percent in the first three months of the year and will drop 20 percent this quarter as demand from carmakers and builders slumps. “This reflects that we are a major supplier of producers in the automotive and building industries, both of which are leading the business declines,” Chief Executive Officer Abdulla Kalban said today in a speech to the CRU World Aluminium Conference in Dubai. The global financial crisis also delayed development projects, causing “significant harm,” he said. Dubal, as the company is known, is still in talks with the state-owned Saudi Arabian Mining Co. on a tie-up to build a smelter in the kingdom, Kalban told Bloomberg News. They will meet again in two weeks, he said, without elaborating. Dubal and its partner Mubadala Development Co. agreed in January 2008 to build the 700,000-metric-ton smelter at King Abdullah Economic City. Dubal also plans to develop a mine and refinery project in India when it gets government approval. Countries such as the United Arab Emirates and Saudi Arabia aim to expand into industries including metals, petrochemicals and plastics that benefit from cheap fuel, even as companies like Rio Tinto Group shelve projects because of falling prices. Future Uncertain The future is “uncertain” for smelter developments in the Gulf that haven’t yet started, including Dubal’s planned Saudi project, Walid Al Attar, the company’s sales and marketing vice president, said in a separate presentation. Dubal plans to produce 1 million tons of aluminum by 2011, Al Attar added. That’s two years later than initially planned. Aluminum prices have fallen 48 percent in the past year, and traded as low as $1,279 a metric ton on Feb. 24 in London. Stockpiles monitored by the London Metal Exchange have more than tripled over the past year to a record 3.86 million tons. London-based Rio, the second-largest producer, scrapped an Abu Dhabi smelter project in July, citing power difficulties. It also pulled out of a planned $10.5 billion smelting venture with Ma’aden, as the Saudi state-owned mining company is known. To contact the reporters on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net; Brett Foley in London at bfoley8@bloomberg.net.