Finance
Middle east shipping disruptions propel aluminium to four-year highs
Published by Global Banking & Finance Review®
Posted on March 9, 2026
2 min readLast updated: March 9, 2026
Quick Summary
Aluminium surged to four‑year highs amid fears of prolonged Middle East shipping disruptions through the Strait of Hormuz, tightening global supply. The shutdown of Gulf exports and the shutdown of South32’s Mozal smelter add further pressure, despite some demand drag from oil and a stronger dollar.
Aluminium Prices Reach Four-Year Highs Amid Middle East Shipping Disruptions
Market Impact and Supply Chain Concerns
By Pratima Desai
LONDON, March 9 (Reuters) - Aluminium prices hit four-year highs on Monday as fears of prolonged shipping disruptions in the Middle East due to the U.S.-Israeli war against Iran fuelled concerns about supplies of the metal.
Aluminium Price Movements
Benchmark aluminium was down 1.5% at $3,394 a metric ton at 1711 GMT from an earlier $3,544 a ton, the highest since March 2022 when prices of the metal used in transport, construction and packaging hit a record $4,073.50.
Shipping Disruptions in the Middle East
Conflict in the Middle East has virtually shut the Strait of Hormuz through which aluminium produced in the region is shipped to the U.S. and Europe.
European Supply Concerns
"The Europeans are particularly concerned, as the Gulf aluminum stoppage comes just as long-term supplierMozal is going offline this month," said Marex analyst Ed Meir.
"Some producers are looking to draw down stocks from outside the region so as to fulfill their obligations, but we suspect this is going to be difficult given the preponderance of Russian metal on the exchange (currently sanctioned) and generally low inventories otherwise."
Mozal Smelter Shutdown
In December, South32 <S32.AX> said its 560,000-metric-ton-per-year capacity Mozal smelter would be placed on care and maintenance from mid-March, after talks with utilities and Mozambique's government failed to yield a new power deal.
Market Structure and Price Trends
Backwardation and Contango Shifts
Worries about supplies have flipped the discount or contango for the cash aluminium contract over the three-month forward into a premium or backwardation. It climbed to $47.4 a ton on Friday, the highest since February 2022 and was last around $22 a ton.
Prices for aluminium along the maturity curve going out to 2036 are backwardated.
Broader Metals Market Context
Oil Prices and Global Growth Outlook
Elsewhere, the oil price surge has raised the prospect of slowing global growth and weaker demand for industrial metals, which also came under pressure from the stronger dollar.
Other Industrial Metals Performance
Copper gained 0.6% to $12,943 a ton, zinc climbed 0.9% to $3,327, lead was down 1% to $1,933, tin rose 0.3% to $50,235 and nickel ceded 0.5% to $17,385.
(Reporting by Pratima Desai. Editing by Mark Potter and Tomasz Janowski)
Key Takeaways
- •Aluminium prices spiked to highs not seen since March 2022, touching around $3,544/t before easing—driven by shipping flows being disrupted through the Strait of Hormuz due to conflict in the Middle East (economies.com).
- •About 8–10% of global aluminium supply routes through the Gulf; shutdowns at major GCC smelters (e.g. Alba, Qatalum) and added war‑risk premiums are tightening flow and raising regional premiums (spglobal.com).
- •South32’s Mozal smelter in Mozambique will go into care‑and‑maintenance around mid‑March due to lack of affordable electricity, further reducing supplies of low‑carbon aluminium for European markets (businessday.co.za).
References
Frequently Asked Questions about Middle East shipping disruptions propel aluminium to four-year highs
1Why have aluminium prices reached a four-year high?
Aluminium prices surged due to shipping disruptions in the Middle East caused by conflict, raising concerns about global supplies.
2How has the Strait of Hormuz affected aluminium shipments?
The Strait of Hormuz has been virtually shut, limiting aluminium exports from the Middle East to the U.S. and Europe.
3What is the impact of the Mozal smelter closure?
The closure of the Mozal smelter reduces supply, further straining aluminium availability amid existing shipping limitations.
4What is backwardation in the aluminium market?
Backwardation is when cash aluminium prices are higher than future contracts, indicating strong immediate demand due to supply concerns.
5How are other metal prices affected by the crisis?
Other metals like copper, zinc, tin, and nickel saw mixed price movements due to oil price surges and a stronger dollar.