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Informist, Tuesday, Mar. 17, 2026

 

MUMBAI – Some aluminium smelters in the Persian Gulf have cut production due to shipping diruptions through the Strait of Hormuz amid the military conflict between the US and Iran. If the disruptions persist, additional curtailments could begin within the next one to two weeks as inventories are depleted, according to Ewa Manthey, commodities strategist at ING Economics.

 

Aluminium smelters in the Gulf rely on continuous imports of raw materials such as alumina and usually hold around three to four weeks of inventories. "This limited buffer leaves production vulnerable to shipping disruptions, particularly as alumina cannot be stored for extended periods," Manthey said. The region produces only around 3% of global alumina and about 1% of bauxite, leaving smelters highly dependent on seaborne supply. With the conflict in its third week, a large portion of this buffer may already have been drawn down.

 

Aluminium Bahrain, or Alba, has initiated a phased shutdown of reduction lines 1-3, representing around 19% of its 1.6 million tonne annual capacity. Production at Qatalum is currently operating at around 60% of capacity. Together, around 560,000 tonnes of annual aluminium capacity in the Gulf is now affected, Manthey said. West Asia produces around 6-6.5 million tonnes of aluminium annually, meaning the current disruptions affect close to 8-9% of regional supply.

 

"Importantly, once potlines are shut, restarting them can take six to twelve months, meaning supply losses may persist even if the geopolitical situation improves," she added.

 

ING's base case scenario is a full disruption in March and a gradual improvement in supply through Apr-Jun. In this case, the global aluminium market could be in a deficit of around 900,000-950,000 tonnes this year. "However, if shipping disruptions extend into April, alumina inventories at Gulf smelters could become increasingly constrained, potentially forcing further production cuts across the region. A move towards our severe disruption scenario would likely require shipping disruptions to persist through May, forcing additional smelters to curtail output and significantly tightening global aluminium supply."

 

In case of severe disruption, aluminium prices could rise to $4,200 per tonne in the second quarter of 2026. At 1534 IST, the three-month aluminium futures on the London Metal Exchange was around 1% higher at $3,424.5 per ounce.  End

 

US$1 = INR 92.37

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Avishek Dutta

 

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