Iran war jolts tech supply chain as aluminum spikes, helium squeeze hits chips

Aluminum hit its highest price in nearly three years Monday after Iranian missiles damaged major Gulf production facilities over the weekend. The strikes came on top of existing problems from Iran blocking the Strait of Hormuz with sea mines.

London Metal Exchange futures jumped 5.5 percent Monday morning, briefly touching $3,492 per tonne before pulling back to $3,381 per tonne by afternoon, still up 3.5 percent for the day. The metal hasn’t traded at these levels since April 2022. Aluminum has climbed about 10 percent since the U.S.-Israeli conflict with Iran started on Feb. 28.

Iranian drones and missiles hit Emirates Global Aluminium and Aluminium Bahrain on Saturday. EGA said its Al Taweelah smelter took major damage in the strikes. Several workers were injured.

The damaged plant produced 1.6 million tons of cast metal in 2025. The Gulf makes about 9 percent of the world’s aluminum. The region imports raw aluminum, refines it, then ships the finished product worldwide, but companies there haven’t been able to export beyond their area since the waterway shut down. Some suppliers have announced shortages. Others have closed refineries completely.

Analysts warn of supply crisis reshaping global market

“The attacks have sent shockwaves through the global aluminum market, raising the risk of a supply crisis that could reshape the industry,” said April Kaye Soriano, an aluminum research analyst at S&P Global Energy. If the damage lasts, the market could move past any temporary softness and start reflecting tighter supply and higher prices, she said.

The problems extend across multiple industries. Aluminum goes into electronics, transportation, construction, solar panels, and packaging. Copper shipments have also been disrupted by the Strait closure, and because Iran was a big producer. That adds to shortages already driven by data center construction.

China is the world’s biggest aluminum producer. The country usually keeps production capped at 45.5 million tons per year to cut emissions and prevent overcapacity.

“If the Chinese government decides that the prices are too high, they can restart a number of idle smelters in the country, and the world will be full of aluminum,” Artem Volynets, chief executive of miner ACG Metals, said on March 18.

But Soriano from S&P Global thinks China’s ability to ramp up output is limited. “While there is some capacity to increase output, the global market remains exposed to further shocks, especially if the conflict spreads to other metal supply chains,” she said.

LNG disruption threatens semiconductor production

The strait carries 11 percent of global seaborne trade by volume each year, according to Tom’s Hardware analysis. It handles 20 percent of worldwide liquefied natural gas commerce.

Qatar’s Ras Laffan Industrial City, which supplies about one-fifth of global LNG, stopped production on March 2 after military attacks and then declared force majeure. About 90 percent of LNG from Qatar and the UAE goes east to Asian markets. European natural gas prices have jumped over 60 percent.

The same facility makes roughly 30 percent of the world’s helium as a byproduct of LNG operations. Helium works as an inert blanket and purge gas when making silicon wafers. It also works as a coolant when liquified. Samsung and SK hynix are watching this closely. Some Taiwanese firms reportedly have multi-year helium reserves stored up.

Asian tech stocks plunge on energy concerns

Over half of DRAM and NAND memory chips come from South Korea. Taiwan makes around 70 percent of the advanced processing chips used in smartphones, computers, and data centers. Both countries are among the biggest importers of liquefied natural gas from Qatar.

Asian equity markets tied to energy dropped fast on March 4. South Korea’s KOSPI stock index fell 12 percent, its biggest daily drop. Samsung Electronics and SK Hynix make up around 40 percent of that index. Taiwan’s TAIEX dropped 4.4 percent, with Taiwan Semiconductor Manufacturing Co. alone representing about 45 percent of the benchmark.

One-third of China’s total LNG use comes through the Strait. There’s also a container shortage building. Ships waiting at the strait can’t reach their destinations to unload, so containers aren’t available for return trips.

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