Aluminum futures in the UK fell to $3,550 per tonne from the three-year high of $3,670 reached on April 16th, as signs of restored vessel traffic through the Strait of Hormuz improved supply prospects from key regional producers. Iranian authorities indicated that commercial ships are now free to transit the chokepoint following ongoing talks with the United States, bolstering expectations for exports from major aluminum suppliers in the area. Prior to the onset of the conflict in March, aluminum production in the UAE, Qatar, and Bahrain accounted for roughly 9% of global supply.
Production outlooks have also brightened elsewhere, as the recent decline in energy prices stemming from these developments is expected to improve profit margins for smelters in Asia and Europe. However, a rapid return to pre-war output levels remains unlikely. Facilities in Qatar and Bahrain sustained damage, and power prices, while off their peaks, are still elevated compared with earlier in the year.
