Iran Strikes Remove 3.2M Tonnes Gulf Aluminum, Futures Jump 3.2%
Iran’s drone and missile strikes on Emirates Global Aluminium and Aluminium Bahrain facilities have disrupted a combined 3.2 million tonnes of annual output, reducing Gulf output by over 9% and sending LME aluminum futures up 3.2% to settle at $3,401/ton. Depleted London Metal Exchange inventories near two-decade lows and a 63% jump in European billet premiums could boost Rio Tinto’s aluminum division profitability by capitalizing on tightened supply and elevated prices.
1. Strike Disrupts Gulf Aluminum Output
Iran’s drones and missiles targeted Emirates Global Aluminium and Aluminium Bahrain smelters, removing a combined 3.2 million tonnes of annual capacity from the market and cutting Gulf output by over 9% when shipments via the Strait of Hormuz are halted.
2. Market Reaction and Price Trends
London Metal Exchange aluminum futures surged 3.2%, settling at $3,401 per tonne, while available LME stocks remain near two-decade lows. European billet premiums jumped 63%, and backwardation in spot contracts signals tight supply conditions ahead of a projected 900,000-tonne deficit in Q2.
3. Rio Tinto Aluminum Division Outlook
With global supply disruptions and elevated premiums, Rio Tinto’s aluminum division stands to benefit from higher spot prices and improved margins. Persistent tight market balances and depleted inventories could sustain favorable pricing over coming quarters.