Strait of Hormuz Disruptions Drive Aluminum Prices Higher

London Metal Exchange three-month aluminum rose 2.5%, outperforming copper. Alba, which produced 1.62 million tonnes in 2025, cited logistical constraints, not facility damage.

The Strait of Hormuz is critical, handling an estimated 5 million tonnes of Middle Eastern aluminum annually, plus bauxite and alumina. Prior to Alba's announcement, Qatar’s state-owned producer reduced output, and the UAE’s primary supplier drew down inventories.

Goldman Sachs analysts project prices will test $3,600 per tonne if regional production losses extend to one month, noting markets have not fully priced in long-term risks; widespread force majeure declarations will follow if logistical bottlenecks persist. This crisis compounds existing pressures, including the impending closure of Mozambique's Mozal smelter.

Downstream manufacturers face mounting cost pressures. Prolonged conflict will accelerate geographic restructuring of aluminum supply chains, making safe passage through the Strait of Hormuz a defining concern for market stability.