China aluminum exports set to surge amid Gulf supply disruption

Wednesday 15 April 2026 - 13:50

By: Dakir Madiha

China aluminum exports set to surge amid Gulf supply disruption

Global buyers are turning to China for aluminum as supply disruptions linked to the war in Iran tighten markets in the Gulf. Analysts cited by Bloomberg expect Chinese exports to rise sharply in the coming months as production outages in the region, which accounts for about 9 percent of global aluminum output, drive prices higher and widen premiums over domestic Chinese levels.

China, the world’s largest aluminum producer, is well positioned to fill the gap. Output reached a record 45.02 million tonnes in 2025, while domestic inventories have climbed above 1.3 million tonnes, the highest level in six years. These stockpiles give smelters the flexibility to redirect supply toward export markets at a time of strong international demand.

The supply shock stems from attacks on key Gulf facilities. Missile and drone strikes hit major plants operated by Emirates Global Aluminium in Abu Dhabi and Aluminium Bahrain, disrupting output and forcing declarations of force majeure on some contracts. Repairs at critical sites could take up to a year, prolonging tight supply conditions.

Market reactions have been swift. Three-month aluminum futures on the London Metal Exchange surged to around 3,571 dollars per tonne, the highest level in four years, before extending gains further. The spot market flipped from a discount to a premium of more than 90 dollars per tonne over futures, signaling acute short-term shortages. The closure of the Strait of Hormuz and a US naval blockade targeting Iranian ports have compounded the disruption, limiting shipping flows across a key global trade route.

Exports from China are already rising. Shipments of unwrought aluminum and related products reached a record 6.67 million tonnes in 2024, and analysts now expect 2026 volumes to match or exceed that level, with growth forecasts between 12 and 18 percent. First-quarter exports have increased 13 percent year on year, while margins on aluminum sheet exports have surged, reflecting stronger international pricing.

Additional supply may come from Southeast Asia. Chinese-backed smelters nearing completion in Indonesia are set to expand regional production capacity. Projects linked to Tsingshan Holding Group could significantly boost output in the coming years. However, analysts warn that supply constraints will persist even if the conflict ends soon, as restoring damaged facilities and stabilizing logistics will take time.