Is Middle East Conflict Triggering Global Aluminium Shortage
Global aluminium supply chains are experiencing disruption at varying levels due to continuing volatility across the Middle East.
The conflict could trigger a critical supply chain crisis for aluminium, potentially removing 3.5 million tonnes of output in 2026, according to Wood Mackenzie. The market is facing lasting instability as disruptions to raw material procurement and shipping delays continue to mount.
Regional aluminium producers are encountering challenges in securing sufficient alumina and other raw materials needed to maintain production as the Middle East conflict continues. Securing adequate supplies remains difficult even when operating at lower utilisation rates. Simultaneously, exports face disruption as shipping risks persist through core routes.
Wood Mackenzie highlights concerns regarding both the short-term and long-term outlook for global aluminium, emphasising the need for enhanced visibility across the sector.
Approximately 6.8 Mt of aluminium production is at significant risk of disruption, representing 18% of global exports excluding China. The majority of Middle Eastern smelters are located along the Strait of Hormuz, with roughly 80% of production in this region destined for export markets. Disruption in the area therefore carries global implications.
"The Strait of Hormuz is effectively a chokepoint for the global aluminium market. Disruptions here could cut off up to 60% of alumina supply to Middle Eastern smelters, rapidly deepening the market deficit," says Charvi Trivedi, Principal Analyst at Wood Mackenzie.
"The longer the conflict persists, the more difficult it becomes for producers to sustain operations, with risks increasingly skewed toward further supply losses and higher prices."
Direct attacks intensify risks
These risks have intensified following direct attacks on smelters in the United Arab Emirates and Bahrain. After strikes on EGA's (UAE) Al Taweelah smelter and Alba (Bahrain), Wood Mackenzie predicts a market deficit of 4 Mt in 2026 and a reduction of global output by 3%.
EGA's facility was forced to halt operations after attacks damaged its power plant. At Alba, 19% of capacity has been shut down due to critical alumina shortages. The facility is expected to operate at a utilisation of 30% following significant damages from the attacks. Qatalum in Qatar is operating at 60% of capacity, while Ma'aden (Saudi Arabia) is supplying alumina to neighbouring smelters at an emergency rate.
Producers are working on contingency options despite high costs, which include 1,400 km overland trucking routes.
Global manufacturing at risk
The majority of Middle Eastern aluminium production is exported to key markets including South Korea, Turkey, Japan and Mexico. Consequently, disruption to production and delayed logistics from production to market poses major risks to manufacturing supply chains.
"What this disruption highlights are how concentrated and fragile aluminium supply chains have become," says Uday Patel, Principal Analyst at Wood Mackenzie.
"With so much production and export infrastructure tied to a single trade route, even short-term disruptions can have outsized and immediate global consequences."
This raises the risk of downstream disruption, with sectors such as automotive and construction exposed to supply chain concerns. Reduced availability of aluminium results in tighter input markets and increased costs.
Sustainability, procurement and supply chain leaders won’t want to miss Procurement & Supply Chain LIVE, taking place at Navy Pier, Chicago, on April 21–22.
Co-located with Sustainability LIVE: The US Summit, the event unites senior decision-makers at a time when supply chains, sustainability and business performance are more interdependent than ever.
Secure your place now for The US Summit – group booking discounts available.
Long-term solutions remain elusive
Due to a high chance of rising prices, Wood Mackenzie predicts aluminium prices could sit somewhere between US$3,700-3,800 per tonne in the upcoming period.
To avoid disruption and high prices, Wood Mackenzie suggests bridging the gap through near-term substitution and thrifting. A move towards the use of scrap, copper and PET could help as a temporary fix, particularly in the packaging industry. However, this represents a short-term fix for what is anticipated to be a long-term issue.
Supply from other regions is also limited, as China has a 45 Mt production cap, while supply from Russia, India and Indonesia cannot meet demands or offset losses.
The conflict has affected every step of aluminium supply chains, from production to smelting and distribution. The effects of this are likely to be felt for years to come, even if short-term solutions can be found, according to Wood Mackenzie.