Iranian attacks on aluminium production plants in the UAE and Bahrain could threaten supplies to global markets and keep prices elevated, analysts warned.
On Saturday, the sites of Emirates Global Aluminium (EGA) and Aluminium Bahrain (Alba) were hit by Iranian attacks. EGA said its main Al Taweelah site sustained "significant damage". It did not provide details of the effects on production, but said "assessment of the damage is ongoing". Alba also said it was looking into the damage to its facilities.
"The latest attacks on aluminium assets in the UAE and Bahrain have materially raised supply risks in the Gulf, a region that accounts for around 9 per cent of global aluminium production," Ewa Manthey, commodities strategist at ING, told The National.
"Europe and the US are the most vulnerable export markets, as both rely heavily on Middle Eastern aluminium following years of smelter closures, and a large share of Gulf exports transit the Strait of Hormuz."
Japan and South Korea are the other markets expected to be hit as the war rages, with the US and Israel launching strikes on Tehran and Iran responding with attacks on Gulf states. Ms Manthey said the Gulf produced about 560,000 tonnes of aluminium a year, a capacity affected by a mix of production curbs and logistics issues, "with risks rising if disruptions persist".
The export of the metal from the Gulf has already faced disruption owing to the blockade of the Strait of Hormuz by Iran. Alba this month initiated a "controlled and safe shutdown" of about 19 per cent of its production capacity owing to disruption in the strait. The move will affect lines 1, 2 and 3, which contribute to Alba’s total production capacity of more than 1.62 million tonnes a year, the company said at the time.
Alba also declared force majeure on its deliveries because of transit issues. Meanwhile, Qatar’s Qatalum also announced a controlled production shutdown on March 3 due to natural gas shortages.
EGA’s Al Taweelah smelter produced 1.6 million tonnes of cast metal in 2025. The company, which has more than 400 customers in at least 50 countries, sold 2.84 million tonnes of cast metal last year. Its aluminium is primarily used in the construction, car, packaging, aerospace and electronics industries.
Soaring prices
Aluminium prices surged by up to 6 per cent when markets opened on Monday, hovering near their highest level in four years following the attacks. Aluminium was holding most of its gains at 3.28pm UAE time, trading 4.5 per cent higher at $3,424 a tonne.
Prices are expected to continue to climb in the short term amid supply disruptions from the Middle East. "The latest news puts prices moving firmly above $3,500 per tonne perhaps as high as $3,800 per tonne in the short term," said Uday Patel, senior research manager in the metals and mining department at Wood Mackenzie.
He expects a "significant impact" to countries around the world, apart from China, due to the situation in the Middle East. "This will lead to shortages and rationing of metal, particularly for billets for construction and primary foundry alloy for the automotive sector," he added.
"This is no longer just a shipping story," said Paul Adkins, founder and managing director of AZ Global Consulting. "The risk has shifted from logistics disruption to direct production risk and that matters because the Gulf is a critical supplier to consumers outside China."
The immediate effect on the aluminium market is likely to be "tighter physical availability, firmer premiums and volatile prices", with the next move depending on the extent of the impact on EGA and Alba, he added.
There are a number of aluminium producers in the region, playing a critical role in supply of metal to the world. They include Maaden Aluminium in Saudi Arabia and Sohar Aluminium in Oman.
"Aluminium prices have jumped sharply since the conflict escalated and the near‑term outlook remains constructive, with prices likely to stay elevated as long as disruption risks in the Gulf persist," Ms Manthey added.
