Middle East conflict disrupts aluminum supply, aluminum prices soar to four-year highs

Aluminum is an important industrial metal and one of the non-oil commodities most affected by Middle Eastern conflicts. Bahrain Aluminum operates the world’s largest single aluminum smelter, with an annual capacity of about 1.6 million tons. Due to disruptions in shipping through the Strait of Hormuz, the company announced last weekend that it would phase out three production lines, accounting for 19% of its total capacity. This news drove international aluminum prices to a four-year high, with the three-month aluminum futures price on the London Metal Exchange reaching nearly $3,500 per ton intraday on the 16th, up more than 11% from before the conflict, before pulling back slightly. Citibank analysts raised their three-month aluminum price forecast from $3,400 per ton to $3,600, and predicted that if supply conditions worsen, aluminum prices could climb to $4,000 per ton. Analysts pointed out that tightening aluminum supply could disrupt supply chains in advanced manufacturing industries, increasing production costs for the automotive, aerospace, and construction manufacturing sectors. (CCTV Finance)