Aluminium Supply Crisis Amidst Iran War Fallout

The ongoing conflict in Iran has triggered a significant supply crisis in the aluminium market, leading to soaring prices and strained availability. The first quarter ended with aluminium reaching record levels, heavily affected by damages to Gulf smelters due to Iranian missile strikes and limited shipping through the Strait of Hormuz.

This situation has highlighted the western supply chain's vulnerability, with the Gulf region representing a significant portion of global smelting capacity and exports. Aluminium Bahrain and other smelters faced operational challenges amid direct attacks, reducing their output drastically.

As the geopolitical situation remains unstable, concerns over prolonged production disruptions loom large, compelling aluminium buyers to grapple with heightened LME prices and increased physical premiums. The long-term consequences of the crisis could affect the market for months ahead.