Bahrain Aluminum Company “Alba” said that it currently produces aluminum at an annual rate of about 1.3 million metric tons, compared to a production capacity that reached about 1.6 million tons before the outbreak of the war between Iran and Israel, according to what the company’s CEO, Ali Al Baqali, said on Wednesday.
Alba describes itself as the world's largest aluminum smelter in one location. The company had stopped production lines 1, 2, and 3 following the outbreak of war, after the closure of the Strait of Hormuz restricted its exports, before the factory was subjected to an Iranian attack in late March.
Al-Baqali told Reuters, on the sidelines of the Fast Markets Aluminum Conference in Budapest, that Alba is currently operating Lines 4, 5 and 6 in its smelter, equivalent to an annual production of 1.3 million tons.
Al-Baqali described the Iranian attack on the factory as a “small and limited attack,” explaining that the company suffered damage that “has already been repaired, and we did not need anything else,” noting that the company’s assets were covered by insurance.
He added that the company's total production capacity will return to 1.6 million tons after completing its acquisition of the French "Aluminum Dunkirk" smelter during the next two months.
To maintain current production levels, Alba receives between 300 and 350 trucks loaded with raw alumina daily, according to the CEO.
Al-Baqali said: “We are able to receive about 7,000 metric tons of alumina per day,” describing logistical operations as “expensive,” but he pointed out that the rise in aluminum prices on the London Metal Exchange and the price premiums on the actual metal compensate for these costs.
Al-Baqali explained that Alba exports its aluminum production through the Saudi port of Jeddah on the Red Sea, as well as from the port of Sohar in the Sultanate of Oman, in light of the continuing military unrest in the region.
European stocks recovered on Wednesday, after two sessions of decline, with the halt of the rise in oil prices, which strengthened investors’ appetite for risk ahead of the US Federal Reserve’s decision on monetary policy.
The European STOXX 600 index rose 0.4 percent to 636.81 points, by 07:05 GMT, while most major stock exchanges rose, and the German DAX index rose 0.4 percent, according to Reuters.
Attention is focused on the Fed's expected decision later today, while markets are currently pricing in a 93 percent probability of raising interest rates by 25 basis points, according to the Fed Watch tool of the CME Group. Inflationary pressures resulting from the conflict with Iran have led markets to reassess their expectations about the path of interest rates.
In Wednesday's trading, oil prices caught their breath and fell 0.6 percent, allowing the stocks most affected by the rise in crude prices to recover, and banking stocks were among the biggest gainers. Barclays shares rose 1.4 percent, while Standard Chartered shares rose 1.7 percent.
These stocks contributed to pushing the Stoxx 600 index to its lowest level in 3 months on Tuesday.
At the level of individual stocks, Babcock International kept its annual forecasts unchanged, and the shares of the British Defense and Engineering Group rose 2.5 percent.
Barratt Redrow also reduced the target for the number of residential units expected to be completed in the fiscal year 2027, citing delays in planning procedures and a decrease in the number of new sales outlets that were opened. However, the company's stock rose 5.1 percent.
The Indian rupee maintained its trading within a narrow range near the level of 96 rupees to the US dollar, today, Wednesday, after the intervention of the Reserve Bank of India contributed to reducing the pressures resulting from the rise in oil prices and US Treasury bond yields.
The Indian currency stabilized at 95.93 rupees to the dollar, by 10:46 am local time, after moving within a range not exceeding 8 paise during the session, according to Reuters.
The rupee was expected to decline at the opening of trading with the rise of the dollar, ahead of the US Federal Reserve's decision on interest rates and the continuation of oil prices at high levels, but the intervention of the Indian Central Bank limited the potential losses.
During recent sessions, the Reserve Bank of India continued to sell the dollar through government banks to limit the decline of the rupee, in parallel with its use of dollar-rupee swap contracts to manage liquidity in the market.
Traders pointed out that the central bank's dollar selling operations were not aimed at defending a specific level of the exchange rate, which reflects its focus on slowing the pace of the rupee's decline, rather than stabilizing a specific price.
The Indian currency remains under pressure due to strong demand for the dollar from importers, in addition to rising US bond yields. Markets are also currently pricing in a probability of more than 90 percent that the Federal Reserve will raise interest rates during its meeting on Wednesday, compared to only about 60 percent a week ago, in light of escalating concerns related to inflation.
It is expected that investors will focus on the new update to the Fed members’ expectations chart (dot plot) and the economic expectations accompanying the meeting. Searching for indications about the possibility of implementing an additional increase in interest rates before the end of the year.
Oil remains the factor that exerts the most pressure on the rupee in the near term, as Brent crude oil hovers around $108 per barrel.
The rise in oil prices is also reflected in the US bond market, as the ten-year Treasury bond yield is close to the 5 percent level, which adds more pressure on the Indian currency.
In this context, CR Forex, based in Mumbai, suggested in a research note that the possibility of a decline in the rupee will be greater during the coming period, with the possibility of it moving towards a range between 96.30 and 96.50 rupees to the dollar, if current conditions continue unchanged.
