Aluminum prices jumped to their highest level since April 2022 on Wednesday after a major Middle Eastern producer suspended shipments due to escalating regional conflicts, raising concerns about widespread supply disruptions through the critical Strait of Hormuz.
London Metal Exchange three-month aluminum rose as much as 2.5% to hit $3,340 per tonne, extending its year-to-date gains to over 9% and outperforming its more closely watched counterpart copper.
The supply shock began when Aluminium Bahrain (Alba), one of the world’s largest aluminum smelters outside China, declared force majeure on shipments, citing transit issues through the Strait of Hormuz. The company, which produced approximately 1.62 million tonnes of aluminum in 2025, emphasized that the disruption stemmed from logistical constraints rather than damage to its facilities.
The strait serves as a vital artery for global aluminum trade, with an estimated 5 million tonnes of Middle Eastern aluminum production passing through annually. Significant volumes of bauxite and alumina also travel in the opposite direction to feed regional smelters, highlighting the waterway’s critical role in the complex supply chain that spans from raw materials to finished metal.
Before Alba’s announcement, Qatar’s state-owned producer had already reduced output due to similar concerns, while the UAE’s primary supplier moved to draw down inventories from outside the region to shield customers from potential disruptions.
Goldman Sachs analysts warned that prices could test $3,600 per tonne if production losses in the region extend to one month. The investment bank noted that markets have yet to fully price in the long-term risks of sustained disruptions, adding that widespread force majeure declarations could follow if logistical bottlenecks persist.
The latest crisis compounds existing supply pressures in a market already bracing for tighter conditions. The impending closure of the Mozal smelter in Mozambique, a key supplier to European markets, had already heightened sensitivity to supply risks.
Traders and investors are now scrambling to assess both short-term and structural implications for the market. Private warnings are circulating that logistical constraints could soon trigger cascading force majeure declarations across the industry, exposing fragilities in the intricate network of bauxite mines, alumina refineries and smelters that feed global manufacturers.
While aluminum prices are finding strong support in the near term, downstream manufacturers face mounting cost pressures. Industry analysts suggest that prolonged conflict could accelerate the geographic restructuring of aluminum supply chains, with safe passage through the Strait of Hormuz emerging as a defining concern for market stability in the coming months.
