Middle East Conflict Disrupts Aluminium Supply
Key Questions
What caused aluminium prices to fall recently?
Aluminium prices declined after an interim US-Iran deal eased supply concerns and led to the reopening of the Strait of Hormuz. LME aluminium settled at $3,498.50/t, a three-week low, with stocks tumbling up to 5%.
Why does a supply gap persist despite cooling tensions?
Gulf output remains down 35% year-on-year due to ongoing repairs at Al Taweelah, while LME backwardation stays near 19-year highs. Additional factors include Canadian supply diversion to Europe and a WBMS Q1 deficit of 363,700t.
How are trade policies affecting aluminium markets?
Trump tariffs are contributing to trade diversion, and recycling shifts are accelerating. Japan’s auto industry remains exposed through 2027 amid these disruptions.
Tensions cooling with US-Iran deal and Strait of Hormuz reopening. LME aluminium recovered to $3,498.50/t (three-week low). Supply gap persists: Gulf output down 35% YoY, Al Taweelah year-long repair. LME backwardation near 19-year high. Canada diversion to Europe continues. WBMS Q1 deficit 363,700t. Japan auto industry exposed through 2027. Alba's Dunkerque acquisition. Trump tariffs add trade diversion. Recycling shift accelerating.