Aluminum futures in the UK have climbed above $3,500 per tonne, their highest level in nearly four years, amid mounting concerns over a deeper global supply squeeze. The war involving Iran has effectively shut the Strait of Hormuz, blocking shipments from the Persian Gulf, which accounts for around 9% of global aluminum output. Two major smelters—one in Qatar and another in Bahrain—have been forced to halt deliveries.
Additional supply is unlikely to be fully offset by China, the world’s largest producer. Chinese aluminum output is expected to stall this year after exceeding the government-imposed cap of 45 million tonnes in 2025, a limit designed to rein in overcapacity. At the same time, China’s efforts to expand production in Indonesia are being constrained by rising energy costs and regulatory obstacles.
Underscoring the tightening market, Rio Tinto has offered aluminum to Japanese buyers at a premium of $350 per tonne for second-quarter shipments. These supply-side risks are emerging just as demand from fast-growing industries continues to accelerate.
