On March 28, Iran launched strikes on key industrial targets in Bahrain and the UAE. Aluminium Bahrain confirmed that its facilities were hit, resulting in minor injuries and ongoing damage assessments. Meanwhile, Emirates Global Aluminium reported significant damage at its Al Taweelah smelter in Abu Dhabi.
Middle East Supply at Risk
The Middle East accounts for nearly 9% of global aluminum production, making it a critical supply hub. The region heavily depends on the Strait of Hormuz for both raw material imports and finished product exports.
Since the escalation of conflict, production disruptions have already materialized. Qatar’s aluminum operations have been affected by natural gas supply issues, while Bahrain has declared force majeure and reduced output by approximately 20%.
As a result, global aluminum prices initially surged due to tightening supply expectations. However, broader macroeconomic concerns—such as rising oil prices and inflation risks—later triggered a temporary correction.
Global Supply Tightening Intensifies
The impact of these disruptions is now visible in global markets. Overseas spot supply has tightened significantly, with traders rapidly drawing aluminum inventories from exchanges.
Reports indicate that nearly 100,000 tons of aluminum were withdrawn from LME warehouses to ease supply shortages in Europe and the United States. As a result, LME aluminum inventories have fallen to their lowest levels in nearly a decade.
Europe, which relies heavily on Middle Eastern aluminum exports to compensate for reduced Russian supply, is facing acute shortages. Spot premiums have surged above $500 per ton, marking a sharp increase compared to previous months.
Supply Disruptions Have Long-Term Impact
Unlike many other commodities, aluminum production is highly energy-intensive and requires continuous operation. Once production is halted, restarting smelters is complex, costly, and time-consuming—often taking 6 to 12 months.
This means that even if geopolitical tensions ease, the lost production capacity cannot be quickly restored, making supply disruptions long-lasting.
For manufacturers, securing reliable sources of aluminum extrusion profiles and custom aluminum structural components is becoming increasingly important to mitigate supply risks.
Industries such as automotive and infrastructure, which rely heavily on aluminum, may experience increased cost pressure. Applications like aluminum running boards and automotive components are particularly sensitive to raw material price fluctuations.
Outlook: Strong Support for Aluminum Prices
Overall, the recent attacks have transformed geopolitical risks into real supply disruptions, reinforcing the structural tightness in the aluminum market.
With confirmed production losses and ongoing risks to energy infrastructure, the global aluminum supply gap is expected to widen further. This provides strong downside support for prices and increases the likelihood of future upward movements.
At V-ONEWELL, we provide stable aluminum supply solutions including extrusion, CNC machining, and automotive components, helping customers navigate supply risks in a volatile global market.
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