The move exacerbates aluminum supply problems following the shutdown of Qatar’s Qatalum smelter a day earlier. The previous day it was announced that Qatar’s industrial giant QatarEnergy, which halted LNG liquefaction on March 2 due to an Iranian strike, continued to curtail production.
Following the news, aluminum prices on the London Metal Exchange jumped 5.1% to $3,418 per ton — the highest level since April 2022. Analysts say prices could continue rising because about 8% of global supply comes from this region.
Goldman Sachs stated that prices could reach $3,600 per ton if production in the Middle East is halted for a month.
On March 4 at its peak, the price of the light metal used in construction, transportation and packaging rose 9% this week following the U.S. and Israeli attacks on Iran over the weekend.
Alba declared force majeure and notified affected customers of contract delays because it cannot ship products.
“It's because of what's happening in the Strait of Hormuz, we are not able to ship. So we're producing, but the metal is here in Alba,” a company spokesperson said.
The company representative assured that “the team is working intensively on identifying alternative shipping solutions to minimize the impact.”
According to information on Alba’s website, its smelter is the largest outside China — the world’s biggest aluminum producer.
Norsk Hydro, a shareholder in Qatar’s Qatalum smelter, declared force majeure to its customers. Hydro said the shutdown of the 648,000-metric-ton-per-year smelter is expected to be completed by the end of March, with full restart potentially taking six to twelve months.
Premiums on European aluminum, paid above LME prices for physical metal, rose to $436 per ton in April — the highest in 3.5 years. U.S. premiums surged to a record $1,075 per pound.
Israel and the United States announced strikes on Iran — operations named Roaring Lion (Israel) and Epic Fury (U.S.) — on Feb. 28.
Numerous explosions rocked Tehran and several other major cities in Iran. The Israel Defense Forces later confirmed that Ayatollah Ali Khamenei was killed in an attack on his residence, which was completely destroyed, on the morning of Feb. 28. The death of Islamic Revolutionary Guard Corps commander Mohammad Pakpour was also confirmed. According to Iran’s state news agency IRNA, senior security adviser to Iran’s Supreme Leader Ali Shamkhani was also eliminated in the attack.
In response, Iran launched ballistic missiles at Israel. Iranian missiles and drones also struck U.S. military bases in Qatar, the UAE, Bahrain, Kuwait, Saudi Arabia and Jordan. Multiple explosions were reported in Dubai, Abu Dhabi and Riyadh.
On March 2, 150 tankers anchored in the Persian Gulf at once. Oil and LNG supplies were halted.
The tankers stopping in the Persian Gulf drove gas prices to a record high.
At the same time, the United States stated that Iran has not closed the Strait of Hormuz.