Iran war is hitting supply chains
The Iran conflict is already compressing global supply chains — aluminium and packaging capacity are being curtailed and food‑price shocks are emerging across developing markets. Boards with manufacturing, logistics, or commodities exposure should be tracking supplier continuity and contract flex clauses as prices and capacity tighten. (packagingdive.com) (reuters.com 1) (reuters.com 2)
Aluminium output in the Gulf has been pulled back sharply: Aluminium Bahrain (Alba) initiated a shutdown of three smelting lines equal to about 19% of its ~1.62 million tonne annual capacity, while Qatalum’s owners have cut production and Hydro has issued a force majeure to Qatalum customers — the two actions together account for roughly 570,000 tonnes of curtailed annual capacity. (mining.com) London Metal Exchange prices spiked to four‑year highs with the LME three‑month aluminium contract reaching $3,545.50 per metric ton last week, European duty‑paid premiums jumping to about $450/ton and the U.S. Midwest premium trading near $2,400/ton over LME — signaling material physical tightness beyond paper-market moves. (sahmcapital.com) Packaging exposure is concrete: roughly 21% of North American aluminium shipments go into packaging, the average publicly traded packaging stock in BofA’s coverage fell about 10% between Feb. 27 and mid‑March, and BofA models show every $10 per barrel rise in oil translates into several cents per pound higher plastic packaging costs. (packagingdive.com) Shipping and logistics bottlenecks have choked exports through the Strait of Hormuz, forcing some producers to reroute shipments — Emirates Global Aluminium has been exploring re‑routing via the port of Sohar in Oman — while inbound alumina and other raw materials are also constrained. (sahmcapital.com) Food‑price risk is rising: the Strait of Hormuz handled about 30% of globally traded fertilisers pre‑conflict, Bank of America warned the crisis threatens 65–70% of global urea supplies, urea prices are reported up roughly 30–40%, and Kenya’s fertiliser costs have risen about 40% already. (newsbreak.com) Operational notices are formalizing commercial risk: Hydro’s customer advisory says a full Qatalum restart could take six to 12 months and the company is issuing force‑majeure notices and running controlled shutdowns, while Alba’s phased closures are explicitly aimed at preserving raw‑material stocks and supply continuity. (hydro.com) Boards with manufacturing, packaging or food exposure now face documented supplier shocks, tightened physical premiums, and multi‑month restart timelines that have already altered contract delivery windows and premium pass‑throughs for customers and downstream buyers. (sahmcapital.com)
