Aluminum futures in the UK jumped to $3,350 per tonne in March, the highest level in nearly four years, as the war in the Middle East sharply intensified an already tight supply situation. After Iran struck targets across all GCC countries, major producers halted refining operations, threatening a broader shutdown in a region that accounts for about 10% of global aluminum supply. Qatar suspended its aluminum venture with Norsk Hydro, and Bahrain’s Alba declared force majeure. At the same time, warehouses were effectively cut off from customers after Iran targeted cargo vessels transiting the Strait of Hormuz.
Beyond the Middle East, Chinese output is expected to stagnate this year after production exceeded the government’s 45 million-ton cap for 2025, part of a broader policy to curb overcapacity in key manufacturing sectors. Smelters are also facing obstacles to expanding in Indonesia, where higher energy costs and growing regulatory risks are hindering new projects. These supply pressures are unfolding against a backdrop of already depleted inventories, with stocks on both the LME and COMEX hovering near record lows.
