While the sharp increases in oil prices since the beginning of the US and Israel’s attacks on Iran triggered concerns that inflationary pressures would increase, sharp fluctuations were observed in the commodity market.
Sharp increases in aluminum prices came to the fore last month due to transportation disruptions and increasing supply concerns.
While approximately 1 in 10 of global aluminum production is concentrated in the Persian Gulf, the closure of the Strait of Hormuz prevents exports. Iran’s missile and drone attacks threaten facilities in the region for a long time.
While aluminum producers in Qatar and Bahrain have stopped production, the global aluminum deficit is expected to increase this year as the Middle East meets a significant portion of global aluminum production.
The damage to the Et-Tavila facility belonging to United Arab Emirates (UAE)-based Emirates Global Aluminum (EGA) in Iran’s attacks on the Khalifa Economic Zone with missiles and unmanned aerial vehicles (UAVs) also caused a significant increase in supply-related concerns.
While it is estimated that the Et-Tavila facility, with a capacity of 1.6 million tons, may be disabled in the long term, in such a scenario, it is predicted that the facility may fall from a surplus of 200 thousand tons to a deficit of approximately 1.3 million tons next year.
On the other hand, China’s aluminum demand is also increasing.
The Qatalum facility in Qatar has dropped to 60 percent capacity with a controlled curtailment since March 3.
The facility, which meets 1 percent of the global supply, is expected to operate at this level until June.
