Middle East conflict puts up to 3.5 million tonnes of aluminium output at risk

The ongoing Middle East conflict is triggering a critical supply crisis in the global aluminium market, with disruptions potentially removing 3–3.5 million tonnes (Mt) of output in 2026, according to Wood Mackenzie. 

Now entering its fifth week, the crisis put 6.8 Mt of aluminium production which is equivalent to 18% of global exports outside China, with the majority of Middle Eastern smelters concentrated along the Strait of Hormuz. According to Wood Mackenzie, around 80–85% of this production is destined for export markets, amplifying the global impact of any sustained disruption.  

“The Strait of Hormuz is effectively a chokepoint for the global aluminium market. Disruptions here could cut off up to 60% of alumina supply to Middle Eastern smelters, rapidly deepening the market deficit,” said Charvi Trivedi, principal analyst, at Wood Mackenzie. 

“The longer the conflict persists, the more difficult it becomes for producers to sustain operations, with risks increasingly skewed toward further supply losses and higher prices,” Trivedi added. 

Source: GTT, Wood Mackenzie Note: Production and export figures are annual numbers for 2025 

Critical inventory depletion and direct attacks on smelters forces emergency measures 

Disruptions to alumina supply chains and direct attacks on aluminium sites have forced producers into emergency responses across the region: 

• EGA’s (UAE) Al Taweelah facility was attacked causing damage to power plant and halting operations  

• Alba (Bahrain) had shut down 19% of capacity due to critical alumina shortages. Following the attack on the smelter on 28 March, the facility sustained significant damages and is expected to operate at an estimated utilisation of 30%  

• Qatalum (Qatar) is operating at around 60% capacity  

• Ma’aden (Saudi Arabia) is supplying emergency alumina to neighbouring smelters  

• Producers are evaluating contingency options, including 1,400 km overland trucking routes, despite high costs  

These measures highlight the limited flexibility available to smelters and the growing risk of further supply disruptions. 

Global supply chain at risk 

With the majority of Middle Eastern aluminium production exported to key markets including Japan, South Korea, Turkey, and Mexico, the disruption poses significant risks to global manufacturing supply chains.  

“What this disruption highlights are how concentrated and fragile aluminium supply chains have become,” said Uday Patel, principal analyst, at Wood Mackenzie. 

“With so much production and export infrastructure tied to a single trade route, even short-term disruptions can have outsized and immediate global consequences.” 

Sectors such as automotive, construction, and packaging are particularly exposed, as reduced availability of primary aluminium tightens input markets, increases costs, and raises the risk of downstream disruption. 

Prices rise as relief options remain constrained 

Wood Mackenzie expects aluminium prices to rise to around US$3,500 per tonne in 2026, with outcomes highly sensitive to the duration and severity of the conflict. 

Outcomes will depend heavily on the duration of the conflict: 

• High-case scenario: Limited demand destruction combined with greater supply disruption widens the deficit further, driving stronger price increases  

• Low-case scenario: A prolonged conflict suppresses demand, helping rebalance the market and easing price pressures  

Three potential sources of relief exist, though each faces significant constraints: 

Supply response: 
China remains constrained by its 45 Mt production cap, while incremental supply from Indonesia, India, and Russia can only partially offset losses – leaving the market in huge deficit. European restarts are limited by high power costs. 

Substitution: 
Shifts toward scrap, copper, and PET, particularly in packaging are underway but remain constrained by technical limitations and the critical role of primary aluminium in key applications. 

Demand adjustment: 
Weaker industrial activity in a prolonged conflict scenario could reduce consumption, partially offsetting supply losses.