Finance
Factbox-Trump's war with iran a major risk for US, European aluminium consumers
Published by Global Banking & Finance Review®
Posted on March 2, 2026
3 min readLast updated: March 2, 2026
Quick Summary
Prolonged U.S.–Iran conflict threatens to disrupt about 8–9% of global aluminium capacity via the strategic Strait of Hormuz, risking supply shortages and rising premiums—particularly in Europe and the U.S., already under pressure from tariffs and tight inventories.
US-Iran Tensions Threaten Middle East Aluminium Supplies & Market Prices
Impact of Middle East Conflict on Global Aluminium Markets
LONDON, March 2 (Reuters) - Prolonged disruptions to Middle East aluminium exports from the war between the U.S. and Iran are likely to hit European and U.S. consumers hardest, given their heavy reliance on the region for supply.
The U.S. and Israel attacked Iran on Saturday in a move that could lead to a closure of the Strait of Hormuz, an important trade route disrupted by Iranian attacks on U.S. military bases.
Significance of Sustained Disruption
IMPACT OF SUSTAINED DISRUPTION 'WILL BE SIGNIFICANT'
The Arabian Gulf is home to around 7 million tons of aluminium smelting capacity, accounting for around 8% of global capacity, said BNP Paribas commodities strategist David Wilson.
"The impact on the aluminium market of sustained disruption to shipments from the region will be significant for both prices and physical premiums, particularly in Europe," he said.
About 75% of Middle Eastern aluminium production is exported, one analyst said.
Middle East Aluminium Export Data
MIDDLE EAST ALUMINIUM EXPORTS
Europe imported around 1.3 million tons or 21% of its primary and alloyed aluminium from the Middle East and Egypt last year, according to information provider Trade Data Monitor.
U.S. imports of primary and alloyed aluminium from the Middle East amounted to nearly 22% of its total at 3.4 million tons last year, according to TDM.
Market Price Reactions
IMPACT ON PRICES
Prices of the metal used in the transport, construction and packaging industries on the London Metal Exchange hit one-month highs at $3,254 a metric ton on Monday.
The physical premium European buyers pay above the LME price, which aims to cover freight, taxes and handling costs, jumped to $378 a ton late last week, up $20 from the start of the week.
U.S. premiums around $1.04 a lb or $2,292 a ton are already at records due to Donald Trump's 50% import tariffs imposed in June last year.
Aluminium Production Costs
ALUMINIUM PRODUCTION COSTS
Aluminium production costs are also expected to rise if energy costs keep rising.
Role of Energy Prices in Aluminium Smelting
Around one-third of aluminium smelting costs on average can be attributable to power, where prices tracking higher natural gas and oil prices because of the war in the Middle East are already climbing.
(Reporting by Pratima Desai; additional reporting by Polina Devitt; editing by Jan Harvey)
Key Takeaways
- •The Middle East (including GCC and Iran) accounts for approximately 6.9 Mt/year of refined aluminium (~9 % of global output or ~22 % excluding China), with about 75 % exported. Disruption via the Strait of Hormuz would sharply constrain supply. (stonex.com)
- •Europe relies heavily—nearly 20 % of its aluminium imports (~1.2 Mt/year) come from the Middle East, making it especially vulnerable to supply cuts. (stonex.com)
- •U.S. aluminium premiums are at record highs due to a 50 % import tariff, while physical premiums in Europe have surged—market tightness and risk are intensifying globally. (investing.com)
References
Frequently Asked Questions about Factbox-Trump's war with Iran a major risk for US, European aluminium consumers
1How does the US-Iran conflict impact aluminium exports?
Prolonged conflict can disrupt Middle East aluminium exports, which are critical for both Europe and the US, leading to shortages and rising prices.
2What percentage of Europe's aluminium comes from the Middle East?
About 21% of Europe’s primary and alloyed aluminium imports came from the Middle East and Egypt last year.
3How might aluminium prices change due to the conflict?
Aluminium prices and physical premiums have already surged, with further disruptions likely to push them higher for both European and US consumers.
4Why are US aluminium premiums already high?
US premiums are at record levels due to Donald Trump's 50% import tariffs implemented in June last year.
5How will rising energy prices affect aluminium production?
Aluminium production costs are expected to rise due to climbing energy prices, as power accounts for about one-third of total smelting costs.
