Aluminum Prices Move Back Near 4-Year Highs

Aluminum futures in the UK held above $3,600 per tonne, hovering near a more than four-year high as the continued blockage of the Strait of Hormuz threatens a prolonged disruption to Middle Eastern supply. The key waterway remained closed, with Iran stating it will not reopen the shipping route while the US maintains its own blockade on vessels traveling to and from Tehran. The Persian Gulf accounts for roughly 9% of global primary aluminum. Beyond restricting shipping flows, the conflict has also directly affected production capacity. Major refineries in the UAE and Bahrain were damaged after being struck by Iranian attacks. Analysts warned that regional supply constraints could persist for months even if hostilities end and Hormuz reopens, as restoring damaged smelting and refining facilities is expected to take considerable time. Emirates Global Aluminium, the region’s largest producer, said it may take at least a year to fully restore output.

Aluminum futures in the UK fell toward $3,540 per tonne, extending their retreat from an over four-year high despite renewed concerns over supply disruptions from the Persian Gulf, a region that accounts for roughly 9% of global output. Iran blocked the Strait of Hormuz again only hours after reopening it, blaming the US for its ongoing blockade of Iranian ports. Investors are now closely watching for details of potential peace talks. Beyond restricting shipping flows through one of the world’s most important trade routes, the conflict has also directly affected production capacity. Key refineries in the UAE and Bahrain were damaged after being hit by Iranian strikes. Analysts noted that supply regional constraints could persist for months even if hostilities end soon, as restoring damaged smelting and refining capacity is expected to take significant time. Emirates Global Aluminium, the region’s largest producer, said it will take at least a year to restore production.

Aluminum futures in the UK sank to $3,550 per tonne from the three-year high of $3,670 on April 16th, as signals of resorted vessel flows through the Strait of Hormuz improved the outlook form key suppliers in the region. Iranian authorities stated that commercial vessels are now free to navigate the chokepoint following ongoing talks with the US, improving the outlook for exports from major producers in the region. Before the start of the conflict in March, aluminum output from the UAE, Qatar, and Bahrain was responsible for around 9% of global supply. Production prospects also improved elsewhere as the pullback in energy prices from the developments are likely to improve margins for Asian and European smelters. Still, output is unlikely to immediately rebound to pre-war levels as facilities in Qatar and Bahrain faced damage, while power prices remained higher this year.