Aluminum prices have hit a four-year high of $3,449.50 per tonne (March 6, 2026), up 3.4% intraday and poised for an 8.5% weekly surge – the largest since January 2023 – as the US-Israel-Iran war disrupts Middle East supply through the Strait of Hormuz, affecting 9% of global production.

Aluminium’s Four-Year High – Key Drivers

Factor	Impact
LME 3M Price	$3,408.50/t (+3.4%), peak $3,449.50/t since Apr 2022
Middle East Share	9% global production (Qatalum, Alba force majeure declared)
Hormuz Exposure	5 Mn t aluminum + bauxite/alumina shipped annually
Price Forecasts	Citi: $3,600/t (3M), $4,000/t bull-case; Goldman: $3,600/t (1-month disruption)
Premiums	Europe P1020: $410-440/t (+$70); US Midwest: $1.06-1.08/lb (record)

India Impact: MCX aluminium ~₹240/kg (+4.2%) tracking LME rally amid Vedanta/Hindalco cost pressures.

Why Middle East Tensions Are Crushing Aluminum Supply

1. Gulf Production Halt

• Qatalum (Qatar): Controlled shutdown​
• Alba (Bahrain): Force majeure on shipments
• Iran (~0.6 Mn t): 50-80 kt already halted
• Maaden/EGA (Saudi/UAE): Trucking alternatives costly, raw materials at risk​

2. Strait of Hormuz Chokehold

• 5 Mn t aluminum exports pass annually to 70 countries​
• Bauxite/alumina imports opposite direction – alumina storability limited (3-4 weeks buffer)
• Freight + insurance premiums up 30-50%​

3. Global Supply Crunch

Pre-existing tightness:

- China capacity caps

- Russian supplies cut (Ukraine war)

- Europe energy crisis closures

- US scrap leakage

2026 deficit forecast: 1.5 Mn t (up from 1 Mn t)

Strengths of Aluminium Rally

• Supply shock: Middle East 9% production + Hormuz 5 Mn t creates structural deficitinvesting+1
• Premium explosion: Europe $410/t, US $1.07/lb record boosts producer margins​
• India upside: Vedanta/Hindalco ~70% domestic supply benefits from LME + rupee weakness
• Green aluminum premium: Energy transition favors low-carbon producers
• Forecast targets: $3,600-4,000/t = 30-40% upside from current levels​

Risks to Aluminium Price Rally

• Demand destruction: $4,000/t triggers industrial cutbacks (auto, construction)
• China slowdown: Weak property + exports pressure consumption (55% global)
• Alternative routes: EGA/Maaden trucking bypasses Hormuz short-term​
• Inventory release: LME stocks rise if panic eases
• Oil linkage: Prolonged war = energy cost spike hurting smelter economics

FAQs

1. Why did aluminum hit a 4-year high?
US-Israel-Iran war disrupted Middle East aluminum exports (9% global) via Strait of Hormuz. Qatalum shutdown, Alba force majeure. LME $3,449/t peak.

2. What are aluminum price forecasts now?
Citi: $3,600/t (3M), $4,000/t bull-case. Goldman: $3,600/t (1-month Gulf halt). Europe premiums $410/t.

3. How does Hormuz affect aluminum supply?
5 Mn t exports + bauxite/alumina imports annually. Alumina stocks last 3-4 weeks before production cuts.

4. Which aluminum producers are hit hardest?
Qatalum (Qatar) shutdown, Alba (Bahrain) force majeure, Iran 50-80 kt halted. EGA/Maaden trucking alternatives.

5. MCX aluminum price in India today?
~₹240/kg (+4.2%) tracking LME. Vedanta/Hindalco benefit from export premiums + rupee ₹91.9.​

6. Will aluminum stay at $3,400+ levels?
Yes short-term (supply shock), but demand destruction at $4,000/t caps upside. Watch Gulf production restart.