Aluminum futures in the UK climbed to $3,340 per tonne in March, the highest level in nearly four years, as the war in the Middle East intensified an already tight supply situation. Iranian strikes on targets across all GCC countries prompted major producers to suspend aluminum refining, threatening a broader halt to operations in a region that accounts for 10% of global output. Qatar halted its aluminum production, while key facilities in the UAE and Bahrain were exposed to the risk of attacks and power outages stemming from strikes on energy infrastructure. At the same time, warehouses were cut off from customers as Iran attacked cargo vessels transiting the Strait of Hormuz.
Beyond the Middle East, Chinese aluminum output is expected to stagnate this year after exceeding the 45-million-ton cap set for 2025. The government’s campaign against expanding manufacturing capacity has dampened expectations that the limit will be raised, while smelters are also facing obstacles to building new plants in Indonesia due to higher energy costs and regulatory risks.
