Aluminium Supply Chain Crisis: The Unseen Impact of the Iran War

The onset of the Iran war has initiated an unexpected crisis in the aluminium supply chain, with Gulf smelters suffering missile damage and significant logistical challenges owing to the closure of the Strait of Hormuz. This has driven aluminium prices to their highest since 2022, signaling potential long-term repercussions on the market.

Key Gulf smelters, accounting for a significant portion of global aluminium exports, have experienced operation constraints and direct attacks, dramatically lowering production capacity. Analysts note this highlights the fragility within the global aluminium supply chain and the ripple effects being felt across the market.

Beyond aluminium, other base metals like copper and tin have seen speculative activity in response to market narratives of demand growth versus supply constraints. However, surpluses in stocks indicate no immediate shortages, contrasting the acute crises facing the aluminium industry.