Aluminum Prices Hit Four-Year High After Bahrain Declares Force Majeure Amid Gulf Shipping Crisis
Global aluminum prices surged to their highest level in four years after Aluminium Bahrain (Alba), one of the world’s largest aluminum producers, declared force majeure on some supply contracts due to shipping disruptions in the Strait of Hormuz. The move has intensified concerns over global supply shortages and pushed benchmark prices sharply higher on the London Metal Exchange (LME).
Alba announced that it had halted shipments to customers after escalating geopolitical tensions in the Middle East disrupted maritime traffic through the Strait of Hormuz, a critical trade route for commodities. While the company confirmed that its smelter operations remain intact and production continues, it said it cannot transport finished aluminum to global markets under current conditions.
Following the announcement, aluminum prices on the LME jumped more than 5 percent, reaching around $3,418 per metric ton—its highest level since April 2022. The rally reflects growing fears of supply constraints as the Middle East plays an increasingly important role in the global aluminum market.
The crisis is compounded by additional disruptions in the Gulf region. A major aluminum smelter in Qatar has begun a controlled shutdown due to energy supply issues, further tightening supply in a market already under pressure. Analysts warn that if disruptions persist, the global aluminum market could face a prolonged shortage.
Industry experts note that Gulf Cooperation Council countries account for roughly 8 percent of global aluminum production, making the region a key supplier for Europe, Asia, and North America. More than 5 million metric tons of aluminum and raw materials such as bauxite and alumina pass through the Strait of Hormuz each year, highlighting the strategic importance of the route for global metals trade.
Financial institutions have begun revising price forecasts upward. Analysts suggest that if production or exports from the region remain disrupted for an extended period, aluminum prices could rise to around $3,600 per ton in the near term.
The surge in aluminum prices is likely to affect multiple industries, including automotive, construction, packaging, and consumer goods, all of which rely heavily on the lightweight metal. Market participants are now closely watching developments in the Middle East and shipping conditions in the Strait of Hormuz for signals on whether supply chains can stabilize in the coming weeks.