Iran’s drone and missile attacks on Persian Gulf aluminum facilities over the weekend have knocked out a major chunk of the region’s production capacity, sending global aluminum prices sharply higher as traders brace for prolonged supply disruptions.
Emirates Global Aluminium (EGA), the Middle East’s largest aluminum producer, suffered a devastating blow at its Al Taweelah smelter in Abu Dhabi, forcing an uncontrolled shutdown of production lines. According to a person familiar with the matter, the attack cut power to the facility, causing multiple potlines to shut down uncontrollably. Molten metal solidified inside the smelting circuits, resulting in severe damage to the plant’s operations. EGA said its site sustained “significant damage,” with no clear timeline for a restart.
Aluminium Bahrain (Alba) also confirmed it was attacked over the weekend and is assessing the extent of the damage. Even before these strikes, Qatar’s Qatalum had already reduced output by about 40%, while Alba had shut down 19% of its capacity.
“The combined halt at EGA, the cuts at Alba and the earlier curtailments at Qatalum take roughly 3 million tonnes of annual capacity offline — nearly half of the Middle East’s aluminum production,” said Ewa Manthey, a commodity strategist at ING Groep NV. The Middle East accounts for about 9% of global aluminum supply.
On the first trading day after the attacks, London Metal Exchange aluminum futures surged as much as 2% before settling 1.9% higher at $3,531.50 a tonne. Shares of rival producers including Alcoa Corp. and Century Aluminum Co. both rallied more than 7% in New York.
The supply shock comes at a time when inventories are already lean. Goldman Sachs had previously forecast a 900,000-tonne deficit in the second quarter, with global stocks covering only 45 days of consumption — a level even tighter than when aluminum hit its all-time high of $4,073.50 a tonne in 2022.
A deeper concern looms over the Strait of Hormuz, the world’s most critical energy and commodity chokepoint, which is now effectively closed. That has left Middle Eastern smelters critically short of alumina, the raw material needed to produce aluminum.
“If the strait does not reopen soon, up to 60% of alumina supply to Middle Eastern smelters could be cut off, rapidly deepening the market deficit,” warned Charvi Trivedi, principal analyst at Wood Mackenzie. The consultancy estimates that disruptions could remove 3 million to 3.5 million tonnes of global aluminum output this year.
“The aluminum supply chain has entered a new phase of sudden production loss, not just gradual constraint,” AZ Global Consulting said in a note following the attacks. Shutting down and restarting an aluminum smelter is an extremely lengthy and costly process — even if the strait reopens, the impact on global production could persist for months.
The threat of supply disruptions from the Middle East is particularly acute for downstream manufacturers. High-value alloy aluminum — used in aircraft, automobiles and construction — relies heavily on the region to supply Europe and the United States.
Alba has already been forced to cut production of value-added products in favor of commodity-grade aluminum to maintain flexibility. Rob Van Gils, CEO of European aluminum products manufacturer Hammerer Aluminium Industries, warned that the wave of smelter closures in the Middle East represents “an incredible threat” to European industry. If specialized aluminum products run out, some industrial users could be forced into temporary shutdowns.
Multiple traders have warned that if the Strait of Hormuz remains closed, aluminum prices could break above the 2022 record high of $4,073.50 a tonne.
