Aluminum futures in the UK climbed to $3,890 per tonne in March, the highest level in nearly four years, as a supply halt in the Persian Gulf exacerbated an already tight market. Iranian strikes on targets across all GCC countries prompted major producers to suspend aluminum refining, raising the risk of broader operational shutdowns in a region that accounts for 10% of global supply.
Qatar suspended its aluminum operations with Norsk Hydro, while Bahrain’s Alba declared force majeure and temporarily halted all deliveries. Additional production from top producer China is not expected to offset these disruptions, as its aluminum output is capped at 45 million tonnes this year in line with government efforts to curb overcapacity in key manufacturing sectors. At the same time, smelters face difficulties expanding in Indonesia due to rising energy costs and heightened regulatory risks.
These developments are unfolding against a backdrop of aluminum inventories at the LME and COMEX that are already hovering near record lows.
