Middle East conflict to drive aluminium deficit, higher prices
Tuesday, April 14 2026 - 07:08 PM WIB
By Romel S. Gurky
Disruptions linked to conflict in the Middle East are expected to push the global aluminium market into deficit and drive prices higher in the near term, according to an analyst at Wood Mackenzie.
Uday Patel, senior research manager for global aluminium markets at Wood Mackenzie, said supply risks have intensified following attacks on smelters in the United Arab Emirates and Bahrain, as well as disruptions to shipping routes.
“The initial challenge for regional producers is to secure sufficient alumina and other raw materials to maintain production,” Patel said, adding that constraints on key shipping routes such as the Strait of Hormuz and the Suez Canal have also affected exports.
Wood Mackenzie now expects a global aluminium deficit of up to 4 million tonnes in 2026, with output projected to decline by about 3% year-on-year.
Read also: Hormuz disruption hits Gulf aluminium output, recovery may take months: IAI
Prices are forecast to rise toward US$3,700 to $3,800 per tonne in the coming weeks, supported by supply disruptions and market uncertainty.
Patel said physical market tightness is already reflected in regional premiums, with the Japan main port (MJP) premium for the second quarter settling at $352 per tonne after initial offers were withdrawn. European duty-paid premiums have also increased and could exceed $600 to $650 per tonne in the near term.
In Europe, additional pressure comes from the closure of the Mozal smelter and the implementation of the carbon border adjustment mechanism, which has tightened supply conditions.
While China is increasing aluminium production, including more than 700,000 tonnes per year of new capacity in 2026, Patel said these additions are unlikely to fully offset supply losses from the Middle East and other disruptions.
On the raw materials side, alumina output is expected to remain broadly stable in 2026, with additional Chinese capacity offsetting disruptions elsewhere. Prices for alumina are forecast to average around $290 per tonne this year.
Editing by Alexander Ginting