LONDON, March 30 (Reuters) – Iranian strikes on Aluminium Bahrain and Emirates Global, major aluminium producers in the Middle East have heightened fears of acute global shortages.
The U.S.-Israel war on Iran and the closure of the Strait of Hormuz has already restricted aluminium shipments to export markets in the U.S. and Europe.
Aluminium Bahrain which runs the world’s largest single-site smelter, said it was assessing the damage from the Iranian strikes. Emirates Global Aluminium, meanwhile, said its Al Taweelah plant sustained “significant damage”.
MIDDLE EAST PRODUCTION AND EXPORTS
The Middle East is home to around seven million metric tons of aluminium smelting capacity, accounting for around 9% of global capacity.
Global aluminium supplies are estimated at 75 million tons this year. About 75% of Middle Eastern aluminium production is exported, one analyst said.
Europe imported around 1.2 million tons, or 20% of its primary and alloyed aluminium, from the Middle East and Egypt last year, according to information provider Trade Data Monitor.
U.S. imports of primary and alloyed aluminium from the Middle East amounted to nearly 22% of its total at 3.4 million tons last year, according to TDM.
ALBA/EGA PRODUCTION
Earlier in March, Alba initiated a shutdown of three aluminium smelting lines accounting for 19% of its capacity, to preserve business continuity due to the disruption in the Strait of Hormuz.
Alba’s smelter has capacity to produce 1.623 million metric tons of aluminium in 2025, according to its website.
EGA’s Al Taweelah plant produced 1.6 million metric tons of cast metal in 2025. The company also has an adjacent alumina refinery at Al Taweelah, which last year produced 2.4 million tons of the aluminium raw material.
EGA, which has another smelter at Jebel Ali in Dubai, said it had substantial metal stock on the water when the conflict began and stock on the ground in some overseas locations.
EGA produces around 2.7 million metric tons of primary aluminium annually in the UAE.
IMPACT ON PRICES
Prices of the metal used in the transport, construction and packaging industries on the London Metal Exchange hit four-year highs at $3,492 a metric ton on Monday.
The physical premium European buyers pay above the LME price, which aims to cover freight, taxes and handling costs, jumped to $469 a ton last week, up $120 since the war started on February 28.
U.S. premiums around $1.09 a lb, or above $2,400 a ton, was already trading at records due to U.S. President Donald Trump’s 50% import tariffs imposed in June last year.
(Reporting by Pratima Desai; additional reporting by Polina Devitt; editing by Jan Harvey and Arun Koyyur)
Comments