Aluminium market strain

Aluminium prices have jumped as war damage in the Gulf, tighter shipping routes and new U.S. tariffs squeeze a market with little spare metal left. (mining.com) Reuters reported on April 16 that consultancy Wood Mackenzie sees a global aluminium supply deficit of as much as 4 million metric tons in 2026. The firm said Emirates Global Aluminium’s Al Taweelah smelter, hit by a missile strike in March, could take up to a year to recover. (miningweekly.com) The Middle East accounts for roughly a tenth of global aluminium output, and Bloomberg reported on April 17 that aluminium has risen more than 15% since the Iran war began. The London Metal Exchange index for six industrial metals closed at a record high on Thursday, driven in part by aluminium. (bloomberg.com) Aluminium is the lightweight metal used in window frames, drink cans, cars, aircraft parts, power cables and solar-panel frames. When smelters lose power, raw materials or export routes, buyers in construction, packaging, transport and clean energy all compete for the same reduced supply. (cbsnews.com) The market was already tight before the latest fighting. Wood Mackenzie said sanctions after Russia’s invasion of Ukraine left many Western buyers unwilling or unable to use Russian metal, even though Russian-origin aluminium still made up 270,000 tons of registered London Metal Exchange inventory at the end of March. (miningweekly.com) That leaves a mismatch between metal listed in warehouses and metal many manufacturers will actually take. Reuters said the result is a market that looks supplied on paper but is “running on empty” for consumers that need non-Russian units. (mining.com) U.S. trade policy added another layer on April 2, when President Donald Trump signed a proclamation revising Section 232 tariffs on aluminium, steel and copper. The changes extended duties to the full customs value of covered derivative products, added new products and removed some low-metal-content goods. (whitehouse.gov) Law firm White & Case said the April 2 changes sharply altered costs for importers because tariffs on many derivative goods are now calculated on the whole product value, not just the metal content. BDO said the revisions took effect immediately and raised compliance risks for companies buying metal-intensive manufactured goods. (whitecase.com) (bdo.com) London Metal Exchange data show how little buffer the market has. Exchange aluminium stocks stood near 401,625 tons on April 9, and Reuters said those inventories are concentrated in brands and locations that do not fully solve buyers’ shortages. (worldal.com) (mining.com) A ceasefire or shipping improvement would not quickly reset the market, because smelters need steady electricity, alumina feedstock and months of repair work to restore output. For buyers of cans, cars, cables and building products, the immediate question is not whether aluminium exists somewhere in the system, but whether usable metal can arrive on time. (woodmac.com) (miningweekly.com)