In 1978, a small group of men stood on a dusty outcrop just to the south of Dubai in a meeting that would cement the emirate’s future as a trading hub. Front and centre in the group was Dubai’s ruler, Sheikh Rashid bin Saeed Al Maktoum, who was quickly convinced of the idea of building a manmade port to serve the emirate’s brand new aluminium smelter.
Dubai today is well-known as a glitzy tourist hub, the gateway to the Gulf and home to the planet’s tallest tower, but the city’s success has in many respects stemmed from that fateful decision 35 years ago.
Jebel Ali swiftly became the world’s largest manmade port, and the implementation of a free zone in the area has attracted thousands of companies to set up base in the city. Jebel Ali now plays host to a series of industries, including manufacturing, utilities and logistics. Elsewhere, the growth of Emirates Airline has supercharged Dubai’s retail, tourism and property markets.
It’s sometimes easy to forget that aluminium is where it all began, but this sector is thriving just as much as any of Dubai’s other industries. A discreet exit off Sheikh Zayed Road highway in Jebel Ali, away from the shopping malls and residential areas, leads to a city within a city.
Dubai Aluminium (Dubal) has its base in a large area buzzing with machinery and workers in protective gear and warehouses, separated from the rest of Dubai by power lines and a few kilometres of desert. Dubal’s headquarters is structured like a fort, with a security point at the entrance and special vehicles that are cleared for transportation within the area.
It is here that Dubal runs a business that has blossomed into one of the largest aluminium producers in the world.
Aluminium is a popular metal, second in use to steel, that is found in a vast range of products from cars and planes to soda cans and foil. While specific producers and merchants used to deal almost exclusively with the commodity, the entrance of investment banks into this market in recent years has brought changes to normal operations that has affected the entire industry.
Data from Bloomberg showed that for the past eight years, global supply has exceeded demand, contributing to falling global aluminium prices. Now, investment banks have a hand in managing and restraining supply of aluminium to the market. The banks have set up warehouses at the London Metal Exchange where aluminium is stored, which gives them control over supply, and as a result, prices as well.
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