EXTRA: Aluminium shoots up after war in the Middle East
The war in the Middle East has put the aluminium market under pressure – both in the short and long term.
Right now, the LME price has risen to approximately $3,400/t, the highest level since 2022. Banks expect the price to reach $3,600-4,000/t in the next 3 months.
In comparison, the average price in 2025 was $2635/t
Why is aluminium affected?
There are several factors affecting the aluminium price specifically:
Production is halted
Qatalum, a major smelter in Qatar, has begun a controlled shutdown due to the war. Once a smelter is shut down, restarting production takes 6-12 months. This also means that starting a temporary production in another country is not an option in the short to medium term.
This has caused concern in the market that the supply of aluminium will be right for an extended period of time, even if the war ends soon.
The Strait of Hormuz
Another smelter, Aluminium Bahrain (Alba), is the world's largest aluminium smelter outside China, and production is still running at full capacity. The problem is that Bahrain is locked in the Persian Gulf, and the material cannot be shipped out via the Strait of Hormuz right now.
A third factor is that the smelters are dependent on the raw materials for production – bauxite and alumina – being shipped in through the Strait of Hormuz. If the Strait continues to be part of the conflict, we may see reduced production as the smelters run out of raw materials.
Premiums and shipping rates
The price increase is not only due to the aluminium price itself. Premiums from the mills are also increasing dramatically. Premiums are mainly determined by the freight cost, and freight is increasing for two reasons: Firstly, a lot of material into Europe will now be shipped from distant countries, which will increase freight costs. Secondly, oil exports from the Gulf countries have also been affected by the situation in the Strait of Hormuz, which is increasing fuel costs.
How does this affect Europe and you?
The Gulf states account for 8% of the world's aluminium production, which is already enough to shake the world market. However, Europe is particularly exposed because 20% of European aluminium is imported from the Gulf region. This increases the risk of price increases and an aluminium shortage in Europe.
We expect the current situation to cause turmoil in the market for a long time. Even if the war ends soon, it will take time for production to get up to full speed and catch up with delays.
What should you do?
If you use large quantities of aluminium, we recommend contacting us. We can then look into possible options to secure volumes or prices.
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