Aluminium prices rallied toward $3,500 per tonne on the London Metal Exchange (LME) as supply risks in the Middle East intensified, according to ING’s commodities team [1]. The escalation in prices was driven by significant damage at Emirates Global Aluminium’s Abu Dhabi smelter and ongoing assessments at Aluminium Bahrain’s facility, following claims by Iran’s Revolutionary Guard that these sites were targeted in retaliation for US-Israeli strikes [1]. Together, Emirates Global Aluminium and Aluminium Bahrain represent approximately 3.2 million tonnes of annual capacity, and any prolonged outage would further tighten an already constrained market [1].
The current disruptions add to previous supply curtailments in the Gulf region. Recent reductions at Aluminium Bahrain and decreased operations at Qatalum have already impacted around 560,000 tonnes of annual capacity, which is about 8-9% of the region’s supply [1]. With aluminium on track for a 10% monthly gain, the market appears increasingly constrained, and restarting smelters is described as costly, complex, and time-consuming [1].
The ING commodities team notes that the escalation of supply risks, combined with existing curtailments, has provided strong support for aluminium prices, highlighting the vulnerability of the market to regional disruptions [1].
CONCLUSION
Middle East smelter outages and prior curtailments have significantly tightened aluminium supply, driving prices sharply higher. The market is facing increased constraints, with further disruptions likely to sustain elevated price levels. Investors and industry participants should monitor ongoing developments, as prolonged outages could exacerbate supply shortages.