Key Moments
- Attacks on Emirates Global Aluminium’s Al Taweelah smelter and Aluminium Bahrain’s operations have escalated aluminium supply risks.
- Combined outages at EGA, Alba, and earlier curtailments at Qatalum could temporarily remove about 3 mtpa of capacity, nearly half of Middle East output.
- LME aluminium prices have climbed more than 10% since the start of the Iran war as traders factor in a lasting period of constrained supply.
Regional Disruptions Tighten Global Aluminium Balance
ING analysts Ewa Manthey and Warren Patterson highlight that recent attacks on key Gulf producers have significantly increased concerns over aluminium supply. According to their assessment, Iranian strikes on Emirates Global Aluminium’s Al Taweelah facility and Aluminium Bahrain’s plant have created a meaningful shock to regional output at a time when the market is already sensitive to supply disruptions.
The analysts underscore that these events are feeding into a broader narrative of tightening availability, with the market shifting its focus from temporary interruptions to the risk of a more prolonged shortfall.
Prolonged Outages Threaten Nearly Half of Middle East Capacity
“Emirates Global Aluminium (EGA), the Middle East’s largest aluminium producer, said a full resumption of production at its Al Taweelah smelter could take up to 12 months after it was hit in an Iranian attack at the end of last week.”
The impact is not limited to a single producer. The analysts note that the combination of the halt at EGA’s 1.6 mtpa Al Taweelah smelter, reduced activity at Aluminium Bahrain (Alba), and earlier curtailments at Qatalum represents a substantial hit to regional capacity.
“A halt at EGA’s 1.6 mtpa Al Taweelah smelter, Alba’s reduced operations and earlier curtailments at Qatalum would take around 3 mtpa of capacity offline – close to half of Middle East aluminium production, lifting our supply deficit to around 2-2.5 Mt.”
Market Reaction and Price Dynamics
The supply shock has quickly translated into higher prices on the London Metal Exchange, as investors reassess the balance between regional production and global demand.
“Against this backdrop, LME aluminium prices are up more than 10% since the start of the Iran war, reflecting a rising geopolitical risk premium and growing concern that Middle Eastern disruptions could translate into sustained tightness rather than short-lived supply shocks.”
Impact Overview
| Producer / Market | Event / Status | Capacity Impact |
|---|---|---|
| Emirates Global Aluminium (Al Taweelah) | Hit in Iranian attack; full resumption could take up to 12 months | 1.6 mtpa smelter halted |
| Aluminium Bahrain (Alba) | Reduced operations | Included in total 3 mtpa offline |
| Qatalum | Earlier curtailments | Included in total 3 mtpa offline |
| Middle East aluminium production | Regional impact from combined outages | Around 3 mtpa offline, close to half of regional output |
| LME Aluminium prices | Reacting to heightened geopolitical and supply risks | Up more than 10% since the start of the Iran war |
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