This article first appeared in The Edge Financial Daily on June 8, 2018

KUALA LUMPUR: Aluminium Co of Malaysia Bhd (Alcom) sees aluminium prices staying above US$2,000 (RM7,960) per tonne for the next six months despite volatility in the commodity’s pricing.

On Wednesday, aluminium traded on the London Metal Exchange climbed 1.4% to US$2,345 a tonne, the highest since May 10.

Since the US imposed sanctions on Russian companies, aluminium prices have swung sharply. This was followed by the White House imposing tariffs on steel and aluminium imports, heightening uncertainty for businesses.

Alcom chief executive officer cum president Heon Chee Shyong said aluminium pricing has been volatile for the past one month and will remain so going forward in light of geopolitical risks.

“Aluminium prices are fluctuating more than it’s fundamentally justified,” said Heon, adding that: “It (prices) is rather geopolitical-influenced at the moment.”

On the group’s prospects, the aluminium sheet and foil products maker expects a strong year for the financial period ending Dec 31, 2018 despite the geopolitical risks and external headwinds that have caused uncertainty for the business.

The demand for its products is still stable and its key market in Europe is holding strong, said Heon. The group also intends to continue to seek out and penetrate other new geographies for market expansion and to improve margins.

On the other hand, Alcom is also set to develop a property project with a gross development value of about RM500 million in Kota Damansara.

Its managing director Datuk Lim Chee Khoon said the land to be acquired in Kota Damansara, Selangor will be developed into an e-commerce hub comprising showrooms, offices and storage spaces to serve the growing needs of digital businesses.