Aluminium: Supply shock supports prices – ING

ING’s Ewa Manthey and Warren Patterson note Aluminium has rallied after Iranian attacks damaged major producers EGA and Alba, compounding existing curtailments in Gulf capacity. With up to 8–9% of regional supply at risk and the Middle East accounting for a significant share of global output, they remain constructive on Aluminium prices given rising odds of prolonged disruption.

Middle East outages tighten Aluminium market

"Aluminium supply risks in the Middle East intensified over the weekend after Iranian attacks hit two major regional producers. Emirates Global Aluminium (EGA) said it sustained significant damage, while Aluminium Bahrain (Alba) is assessing the extent of disruption to its operations. Aluminium climbed as much as 6% to $3,492/t in early trading on the LME."

"The latest escalation comes on top of already tightening supply conditions across the Gulf. Recent curtailments at Alba and Qatalum have already affected around 560kt of annual capacity, leaving close to 8-9% of regional supply at risk."

"With the Middle East accounting for roughly 9% of global aluminium production, any prolonged outages would further tighten the market, especially given the region’s limited raw material inventories and dependence on uninterrupted shipping through the Strait of Hormuz."

"We remain constructive on aluminium prices. The latest attacks increase the probability of a prolonged disruption scenario, where supply losses could persist even if geopolitical tensions ease, reinforcing upside risks to prices."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)