Qatar conflict and Qatalum

A conflict between Middle Eastern nations has isolated Qatar from its neighbours. In the process, it has caused problems for the Qatalum smelter.

Norsk Hydro, 50% owner of the smelter along with Qatar Petroleum, has published a statement saying that shipments of finished metal have struck problems. According to the announcement, shipments go through the port of Jebel Ali in the United Arab Emirates, but this port is blocking Qatari exports, as part of the diplomatic dispute.

International affairs in the Middle East are not my domain, but if this issue continues, it’s not just the shipment of finished metal that I would be worried about. Qatalum will need alumina shipments to arrive unimpeded. Vessels that would have otherwise stopped at neighbouring smelters to offload partial alumina cargoes may find themselves blacklisted or prevented from sailing to or from Qatar if this dispute gets any worse. And it won’t be just alumina that could be impacted. All smelters need regular deliveries of other essential ingredients, from aluminum fluoride to calcined petroleum coke, to collector bars and pot covers.

Most smelters run on alumina inventory levels of about 30 days, so if Qatalum is running to the same algorithms, there won’t be a problem for a while. But one of the things about the international smelting community is that even though plants may be competitors to each other, they try to help each other out. (Back channels have existed long before Jared Kushner thought of them.) If one plant runs short of say aluminium fluoride, or any of the other essential raw materials, that plant’s neighbours will usually step in to help if possible. Because of this diplomatic dispute, that hep may not be forthcoming.

This is all just nervous speculation on my part - none of the above may happen. Let’s hope this dispute is resolved quickly, not just for Qatalum’s sake. But if it drags on, then it’s worth watching what happens to the total logistics situation, not just the delivery of finished metal to the market.

Feature image thanks to Qatalum.