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Aluminium: Gulf outages tighten global balance – ING

ING analysts Ewa Manthey and Warren Patterson report that Aluminium supply risks have intensified after Iranian attacks on Emirates Global Aluminium’s Al Taweelah smelter and Aluminium Bahrain’s plant. They stress that prolonged outages could remove a large share of Middle East capacity, lifting the regional deficit, while LME Aluminium prices have already risen over 10% as markets price in sustained tightness rather than brief disruptions.

Regional outages drive supply deficit

"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."

"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."

"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."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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