Middle East powder keg detonates aluminum market: Bahrain Aluminum Industry encounters irresistible force, aluminum prices soar to four-year high.

On Wednesday, due to the ongoing conflict in the Middle East region, a major supplier in the area suspended metal deliveries, causing aluminum prices to surge to the highest point in four years. Earlier that day, Aluminium Bahrain BSC (Alba) notified customers that they had initiated the "force majeure" clause in their supply contracts and suspended shipments due to transportation issues through the Strait of Hormuz. The price of aluminum on the London Metal Exchange rose by over 4% on Wednesday, nearing $3420 per ton, the highest level since April 2022. Prices for this industrial metal have increased by over 12% so far this year, outperforming its more popular counterpart copper. Aluminum is the second most widely used industrial metal after steel. However, in recent years, supply shocks have occurred periodically, exposing the vulnerabilities of the complex network consisting of bauxite mines, alumina refining plants, and aluminum smelters that supply manufacturers worldwide - these links often provide highly specialized products that are difficult to replace. The turbulence in the Iran situation has impacted the global aluminum supply chain, putting pressure on manufacturers to raise prices. Traders generally expect widespread supply disruptions unless transportation through the Strait of Hormuz can quickly resume. It is estimated that over 5 million tons of metal produced annually by smelters in the Middle East region need to be transported through this critical waterway. Meanwhile, large quantities of bauxite and alumina used to supply these smelters also need to pass through the strait in the opposite direction. Goldman Sachs analysts stated that if production interruptions in the region continue for a month, aluminum prices could surge to $3600 per ton. As conflicts intensify this week, aluminum traders and investors are beginning to assess the short-term and long-term impacts on the market. Some industry insiders privately warn that logistical restrictions could soon lead to widespread "force majeure" declarations. Supply disruptions cascade Before Aluminium Bahrain suspended deliveries, Qatar's state-owned aluminum producer had already cut production, while a major supplier in the UAE was seeking to extract inventory from outside the region to avoid impacting customers. In fact, even before the escalation of the Iran situation, the aluminum market was already facing expectations of tightening supply due to the imminent closure of the Mozal smelter in Mozambique (a major supplier to the European market). According to information on the Aluminium Bahrain website, the company, which owns the world's largest aluminum smelter (excluding the top producing country, China), produced approximately 1.62 million tons of aluminum in 2025. A spokesperson for the company stated, "This force majeure is not due to any disruption or damage to the smelting facility itself."