Aluminium: Hormuz disruption tightens supply – ING

ING’s Warren Patterson and Ewa Manthey report that Aluminium Bahrain has begun a phased shutdown equal to about 19% of its capacity due to Strait of Hormuz disruptions. They argue this underscores structural tightness in Aluminium, with low inventories and constrained supply chains, especially in Europe, likely keeping prices and regional premiums supported as long as Hormuz-related issues persist.

Aluminium market stays structurally tight

"Aluminium Bahrain (Alba) has initiated a phased production shutdown, citing ongoing supply and transit disruptions stemming from the closure of the Strait of Hormuz. The company said it shut three production lines, equivalent to around 19% of its 1.6 million‑tonne‑per‑year capacity, to conserve raw‑material inventories and stabilise operations."

"The curtailment highlights mounting strain on Middle East aluminium supply chains, with shipping disruptions constraining both metal exports and alumina feedstock flows. Coming after Alba’s force majeure declaration earlier this month, and alongside outages elsewhere in the region, the move reinforces tight physical conditions."

"The shutdown reinforces our view that aluminium remains structurally tight, with limited buffers to absorb supply shocks. Beyond supporting outright prices, it should keep regional premiums elevated. This is particularly true in Europe, where low inventories and ongoing stock withdrawals indicate persistent physical tightness."

"As long as Hormuz‑related disruptions persist, any price pullbacks are likely to be shallow, with tight spot availability continuing to underpin both prices and premia."

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