Aluminum prices are on the cusp of a record jump as the Iran war continues
The war in Iran caused the closure of Metalsand advertising "Force majeure" In all aluminum industry centers in the Middle East, threatening a supply crisis for the key industrial metal with global inventories already approaching historic lows.
Several major production companies announced their inability to fulfill their contracts, including Aluminum Bahrain (Alba), one of the world’s largest aluminum smelters, Inc "Norsk Hydro"which operates the Qatar Aluminum (Catalum) smelter in partnership with Qatar Aluminum Manufacturing Company.
The Qatar Aluminum smelter began the closure process this week after Qatar Energy Company, the main gas supplier, announced its inability to supply the plant with fuel. The smelter reported that full restart may take from 6 to 12 months.
The Alba smelter, which declared a state of force majeure on Wednesday, is ranked among the largest smelters in the world, and produced 1.6 million tons of aluminum last year.
The Middle East region contributes about 10% of the global production of refined aluminum, and its main smelters are concentrated in Bahrain, Qatar and the United Arab Emirates. Europe and the United States are major importers of aluminum from the region.
Max Layton, an analyst at Citi, said that aluminum prices on the London Metal Exchange could rise to 4,000 $per ton from $3,322 today if the turmoil continues. The benchmark market price in London is currently at its highest level since 2022.
He said that the instability in the production process, which leads to delays for several months "Creates a prolonged risk to supplies"
Aluminum prices actually rose in the final months before the war, partly due to US tariffs on imports and concerns about tightening global supplies.
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