Aluminum futures in the UK fell below $3,250 per ton, hovering at their lowest level in more than three weeks, as expectations of improved supply and a stronger US dollar pressured prices. Several smelters are in the process of restarting and bringing previously idled capacity back online, while others are pressing ahead with expansion projects.
In addition, rising Chinese exports are helping to offset some of the supply losses from the Gulf, with aluminum shipments climbing 17.2% year on year in August. Weak domestic demand and elevated inventories in China are enabling more metal to be directed to overseas markets.
Before the war, the Gulf accounted for roughly 10% of global aluminum supply, but disruptions to shipping through the Strait of Hormuz have sharply curtailed regional exports, and GCC production fell 44% year on year in July. At the same time, hawkish comments from several Federal Reserve officials pushed the US dollar higher, making dollar-denominated commodities more expensive for buyers worldwide.
