Key Moments
- Aluminum trades above $3,500/t. Analysts now see $4,000/t on the horizon as a 1.4Mt deficit builds.
- The Iran war and the Strait of Hormuz closure have cut exports. As a result, global supply has tightened.
- Speakers at the summit said priorities are shifting. Security of supply now matters as much as decarbonization.
Supply Shock Drives Higher Price Outlook
Aluminum prices are expected to rise toward $4,000/t. The Strait of Hormuz remains closed. As a result, metal flows stay restricted. CRU’s Paul Williams shared this view at the World Aluminium Summit in London.
He said the market faces a deficit of about 1.4Mt. In addition, the Iran war has disrupted exports from key Middle Eastern producers. Therefore, global supply has tightened further.
Williams noted that past deficits followed strong production. This time, however, the market was already tight. So the impact has been sharper.
He added that further supply losses may not widen the deficit much. Instead, demand may adjust. “Any further supply reduction will likely hit demand 1 to 1,” he said.
Price Surge and Cost Impact
Aluminum now trades above $3,500/t. A year ago, it was near $2,500/t. Prices have moved up quickly.
Williams sees $4,000/t as a realistic next target. However, he warned about downstream effects. With tariffs included, European buyers could face prices near $7,000/t.
| Metric | Value |
|---|---|
| Current aluminum price | Over $3,500/t |
| Price one year ago | Just over $2,500/t |
| Expected price level | $4,000/t |
| European end-user cost (est.) | $7,000/t |
| Market deficit | 1.4Mt |
Long-Term Demand Remains Strong
Despite short-term shocks, long-term demand stays solid. China’s clean tech push remains a key driver. Aluminum is widely used in solar, EVs, batteries, and power grids.
Williams expects Chinese battery storage demand to reach 2Mt per year by 2035. However, China’s production cap limits domestic supply growth. As a result, new capacity may shift to Africa, the Middle East, and Southeast Asia.
Industry Sees Rising Volatility
At the summit, Norsk Hydro’s Sinead Wyer called the Iran shock the “largest one-month disruption” in recent memory.
Emirates Global Aluminium’s Adel Abubakar said instability has become routine. He pointed to Covid-19, Red Sea disruptions, and tariffs as earlier shocks. Now, the Iran war adds further pressure.
He added that conditions worsen each year. “Every year is more challenging,” he said.
Supply Security Becomes the Main Focus
Producers now focus more on resilience. Decarbonization still matters. However, supply security has moved to the center.
Wyer said energy remains a key driver. She also noted stronger political support in Europe, Australia, and North America.
Alcoa’s Renato Bacchi said its integrated supply chain helps it compete. He added that this structure supports customer needs for stable supply.
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