Aluminium Market in Crisis: The Ripple Effect of War

The Iran war has severely disrupted the global aluminium market, affecting sectors such as construction and transport. Key smelters face damage and power shortages, pushing the market into a supply deficit. Western buyers encounter mounting costs, while governments consider difficult choices to mitigate impact.

The ongoing conflict in Iran is causing a significant disruption in the global aluminium market, with potential consequences for various industries including construction and transport. The situation has escalated following a missile strike on Emirates Global Aluminium's Al Taweelah smelter.

Additionally, Aluminium Bahrain, a key production site, is also affected but the extent of damage remains unknown. Amid power shortages and restricted shipping lanes, smelters face the risk of depleting raw material stocks, leading to an anticipated deficit of up to 4 million metric tons this year.

Western buyers will face the most severe effects, with limited options to address the supply gap. This challenging scenario raises critical questions for policymakers seeking to alleviate the economic impact.

(With inputs from agencies.)