Aluminum Prices Surge Toward 4-Year High — ING Warns Of Upside Supply Risks, Says Europe is ‘Particularly Exposed’

The escalating conflict between the U.S., Israel, and Iran has disrupted the aluminum supply chain, which was already facing a deficit due to smelter shutdowns and lower Chinese production.

• Spot aluminum prices have risen more than 9% since the start of the conflict between the U.S., Israel, and Iran.
• Europe is particularly exposed, relying on Gulf countries for roughly 30% of its aluminium imports, ING noted.
• Earlier this week, Qatalum warned that a full restart of smelters could take six to twelve months.

Rising tensions in the Middle East heightened supply concerns and disrupted global trade flows, pushing spot aluminium prices up 2% to $3,329.3 per ton — their highest level since April 2022.

Spot aluminum (ALI/USD) prices have risen more than 9% since the start of the conflict between the U.S., Israel, and Iran. The 3-month aluminum futures expiring in May jumped 3.5% to $3,296 per ton.

Meanwhile, Century Aluminium (CENX) stock jumped more than 7% to its highest since August 2008, while Kaiser Aluminium Corp (KALU) shares gained 2% to their all-time high.

Middle East Disruptions Begin To Hit Supply

Qatalum, jointly owned by Qatar’s state aluminium producer and Norsk Hydro, has started a controlled shutdown of output after regional conflict escalated, ING said in a note on Tuesday. The company warned that a full restart could take six to twelve months and issued force majeure notices to customers.

Force majeure is a contract clause that releases one or both parties from their obligations if an unexpected and extraordinary event prevents them from fulfilling the agreement.

Meanwhile, Emirates Global Aluminium said it may rely on offshore inventories to manage shipping delays.

Europe Could Be Worst Hit

The Gulf Cooperation Council accounts for about 8% of global aluminium output but produces far less alumina and bauxite, making the region heavily dependent on imported raw materials. Smelters typically hold only three to four weeks of alumina inventories, meaning prolonged disruption through the Strait of Hormuz could quickly threaten production and exports.

Europe is particularly exposed, relying on the region for roughly 30% of its aluminium imports, while the U.S. sources more than 20%, ING added.

The global aluminium market was already facing a deficit, as China’s production caps, ongoing trade disruptions, and the planned shutdown of the major Mozal smelter continued to strain supply.

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