Aluminum Prices Surge on Gulf Supply Disruptions

Aluminum prices have surged amid escalating disruptions from the Gulf conflict, as major smelters in Bahrain and Qatar curtail production due to blockages in the Strait of Hormuz, threatening global supply chains for the industrial metal.

The London Metal Exchange price for aluminum climbed as much as 0.9 percent on Monday, reaching 3,408 dollars per metric ton after a two-day decline, marking levels not seen since 2022. Analysts at TD Securities attribute the volatility to a supply shock from the conflict, which has halted shipments and restricted access to raw materials like bauxite and alumina. Over five million metric tons of primary aluminum pass through the strait annually from producers in Bahrain, Qatar, Saudi Arabia, and the United Arab Emirates, representing about nine percent of global output.

Aluminium Bahrain, or Alba, the world's largest single-site smelter, initiated a phased shutdown of three production lines on Sunday, cutting approximately 20 percent of its 1.6 million metric ton annual capacity. The move, equivalent to 2.2 percent of worldwide production, aims to conserve raw material inventories amid severely disrupted maritime routes. Alba, which produces...