Aluminum Price Reaches Four-Year High: Iranian Attacks on Gulf Smelters Shake Markets
By Redaktion aktie.com
This article was created with the help of artificial intelligence.
Aluminum futures in the United Kingdom surged by 5% in early March 2026 to over $3,440 per tonne, reaching their highest level in four years. The trigger for the price rally was Iranian retaliatory attacks on production facilities in the Middle East, which caused significant damage to two of the region's largest aluminum smelters.
\n\nGulf production facilities severely damaged
\n\nEmirates Global Aluminium (EGA), the largest aluminum producer in the United Arab Emirates, reported "significant damage" to its facility in Abu Dhabi. In parallel, Aluminium Bahrain (Alba), operator of one of the world's largest single smelters, is evaluating the extent of damage to its facilities. The attacks occurred in retaliation for prior US and Israeli military strikes against Iran.
\n\nIn addition to direct hits, air defense debris caused a fire at Jebel Ali port in Dubai, just a few kilometers from EGA production facilities. The escalation led to a blockade of the Strait of Hormuz, a key trade route for regional aluminum exports.
\n\nRegional capacity already under pressure before attacks
\n\nAlba had already shut down 19% of its annual capacity of 1.6 million tonnes before the attacks. The reason was shipping disruptions in the Hormuz Strait, which made exports impossible. The Middle East accounts for around 9% of global aluminum production – the now-occurring outages are intensifying an already strained supply situation.
\n\nAt the London Metal Exchange (LME), aluminum prices rose 3.6% and reached their highest level since January. On March 27, 2026, aluminum traded at $3,275.20 per tonne, an increase of 0.81% from the previous day. Month-over-month, the price gained 2.53%, and year-over-year it is 28.40% above March 2025 levels.
\n\nPrice developments and historical context
\n\nAfter surging to around $3,500 per tonne in mid-March, the price corrected slightly lower but remains significantly above levels from previous months. For comparison: in 2024, the high was $2,596 per tonne. The all-time high dates from March 2022 at $4,103 per tonne, when the Russia-Ukraine conflict shook commodity markets.
\n\nTrading Economics forecasts a price of $3,276.80 per tonne for the end of the second quarter 2026. The 12-month forecast stands at $3,472.04 per tonne.
\n\nReal purchasing prices decouple from exchange rates
\n\nWhile brief price corrections at the LME – sometimes triggered by speculative market sentiment or political statements – suggest relief, a different picture emerges in purchasing departments. Actual supplier quotes remain significantly above exchange prices, as physical availability and logistics bottlenecks add additional price pressure.
\n\nConcerns about prolonged supply disruptions from the Middle East amplify this effect. Should the blockade of the Strait of Hormuz persist, supply shortages are likely to increase and create further price pressure.