Aluminium Bahrain, which runs one of the world’s biggest smelters, warned customers on Wednesday it had halted shipments due to the widening Middle East conflict, exacerbating supply concerns after a Qatari smelter shut down a day earlier.
Aluminum prices on the London Metal Exchange jumped as much as 5.1% to $3,418 a ton after the news, their strongest since April 2022, and analysts said prices could go still higher since about 8% of the world’s supply is produced in the region.
Bloomberg reports that Aluminium Bahrain (Alba) began a controlled, safe shutdown of three reduction lines on Sunday to preserve business continuity amid heavily disrupted maritime shipping routes through the Hormuz chokepoint.
This production shutdown accounts for about 19% of Alba’s total output capacity of 1.62 million tons per year, representing roughly 2.2% of global aluminium production. The suspension aims to preserve its inventory of raw materials.
Alba’s cutback, along with the risk of broader disruptions to the aluminum market in the Gulf, could drive aluminum prices in the London market even higher.
Meanwhile, Iranian Foreign Minister Abbas Araghchi assured the world on Saturday evening that the Hormuz waterway was open to all vessels, except those linked to the US or Israel.
Maybe we could all fly Chinese flags.
Check with your local scrap yard. Ours was paying 80 cents a pound for cans, foil, and other aluminum scrap. Probably well higher soon.