Iranian strikes on Gulf aluminium plants push prices to four-year highs

Wednesday 01 April 2026 - 16:45

By: Dakir Madiha

Iranian strikes on Gulf aluminium plants push prices to four-year highs

Iranian missile and drone strikes against two of the Middle East's largest aluminium smelters over the weekend have thrown global supply chains into disarray, driving prices to their highest level in four years and raising the prospect of a prolonged market deficit.

Emirates Global Aluminium confirmed Saturday that its Al Taweelah smelter near Abu Dhabi sustained significant damage during Iranian attacks on the Kezad industrial zone, leaving six employees injured. Aluminium Bahrain, known as Alba, said its facility was also targeted, with two workers sustaining minor injuries. Iran's Islamic Revolutionary Guard Corps claimed responsibility, stating that both companies were linked to U.S. military supply chains and that the strikes were retaliation for U.S.-Israeli operations against Iranian industrial sites.

According to Bloomberg, damage at Al Taweelah likely triggered an uncontrolled shutdown, causing molten metal to solidify inside smelting circuits. Natixis analyst Bernard Dahdah warned the repairs could take at least a year. EGA has since moved to sell large volumes of alumina it can no longer process, offering cargoes for shipment from April through June. Together, the two damaged facilities represent approximately 3.1 million tonnes of annual capacity, or around 9% of global aluminium output.

Spot aluminium prices on the London Metal Exchange climbed to $3,585 per tonne on March 31, their highest since the 2022 energy crisis. The metal is on track for a monthly gain exceeding 10%, the strongest in nearly two years, according to Bloomberg. Futures had surged as much as 6% in early Monday trading before paring gains.

Goldman Sachs, which had already raised its second-quarter aluminium price forecast to $3,200 per tonne before the attacks citing Middle East disruptions, warned that a worst-case scenario with Gulf production entirely offline could push the quarterly deficit to 2 million tonnes and lift average 2026 prices to $3,400. Wood Mackenzie said in a March 31 assessment that the conflict could remove 3 to 3.5 million tonnes of production from the market in 2026, with 6.8 million tonnes of output, equivalent to 18% of global exports outside China, at risk along the strategic Strait of Hormuz chokepoint.

The strikes have exposed the dependence of the United States and other Western economies on Gulf aluminium. Reuters reported that the attacks targeted major U.S. suppliers, which do not produce sufficient aluminium domestically. Alcoa shares jumped in early Monday trading as investors turned toward North American producers. Macquarie Group estimated that even before the direct strikes, its base case had anticipated a 20% reduction in active regional production capacity, equating to roughly 800,000 to 900,000 kilotonnes of lost output in 2026.

AZ Global Consulting said in a note that the supply chain has entered a new phase, warning that the industry now faces sudden production losses rather than the gradual constraints it had been managing since Iran effectively disrupted Strait of Hormuz traffic in late February.