[Conflict Impact] The outbreak of the Middle East conflict on February 28, 2026, significantly disrupted global aluminum market dynamics, driving increased volatility in aluminum prices. Aluminum prices on the London Metal Exchange (LME) surged alongside escalating tensions, rising from an Official Price of $3,156.5/mt on February 27 to a peak of $3,519.5/mt in early March. Prices later retreated to the $3,200–3,300/mt range in late March, as market sentiment gradually stabilized. On March 28, in response to attacks on Iranian industrial zones, Iran reportedly targeted major regional aluminum producers including Aluminum Bahrain and Emirates Global Aluminum, while Qatar Aluminum declared force majeure. These developments constrained primary aluminum output in the Middle East, tightening market liquidity and increasing supply uncertainty. As a result of supply disruptions, global aluminum availability declined, particularly impacting regions outside China in Asia. Entering April, LME aluminum prices rebounded to $3,400–3,500/mt, breaking above $3,600/mt in mid-April and fluctuating within the $3,500–3,600/mt range. [Shipping Disruptions] The conflict initially disrupted transportation systems across the Middle East, with the Strait of Hormuz being most severely affected. Key aluminum exporters—including the UAE, Saudi Arabia, Qatar, Iran, and Kuwait—faced significant logistical constraints. Exports that traditionally passed through the Strait were heavily restricted, forcing market participants to adopt alternative logistics routes, including land transport to Red Sea ports. These adjustments significantly increased freight costs and extended delivery lead times. In April, the escalation of conflict into the Red Sea region further limited alternative shipping routes. Most Europe–Asia vessels opted to reroute via the Cape of Good Hope, driving both freight costs and transit times higher. According to SMM market research, cargo delivery delays reached 3–5 weeks, while container freight costs surged by as much as 60–70%. [Primary Aluminum and Processing] Reduced Middle Eastern exports tightened primary aluminum supply across major Asian consuming countries, particularly Japan, Thailand, India, and South Korea. In 2024, the Middle East exported 6.408 million mt of primary aluminum and key aluminum products, with these four countries accounting for approximately 20.8% (1.331 million mt). In 2025, exports declined to 6.071 million mt, with imports from these countries totaling approximately 1.215 million mt (~20%). Demand for primary aluminum alloys and billets (notably 6xxx series) remained strong. SMM data shows that following the outbreak of conflict, processing fees for 6063 billets in Southeast Asia rose from $200–250/mt to $250–300/mt, peaking at $300–310/mt. Market feedback indicates a recovery in demand for 6xxx billets, with both domestic and export transactions in Malaysia and Thailand increasing significantly in April. Downstream purchasing sentiment improved, offsetting weaker market conditions observed in January–February. Demand for primary foundry alloys also strengthened. Elevated aluminum prices, reduced Middle Eastern supply, and growth in downstream sectors such as automotive (particularly in Thailand) drove increased enquiries for alloys including A356, AlSi10MnMg, and AlSi10FeMg. Notably, interest in low-carbon aluminum has also increased, reflecting rising alignment with international decarbonization policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM). Against a backdrop of tightening primary supply, importing semi-finished aluminum products from alternative regions may become an increasingly viable option. [Secondary Aluminum] Beyond primary production, the Middle East has also been a significant supplier of aluminum scrap and secondary alloys, serving as an emerging recycling and processing hub prior to the conflict. India and South Korea are key importers of Middle Eastern scrap. In 2024, the region exported 628,000 mt of aluminum scrap, with India and South Korea accounting for 62.6% and 13.5%, respectively. In 2025, total exports rose to 766,000 mt, with imports reaching 489,000 mt (India) and 101,000 mt (South Korea). Amid the conflict, buyers from Japan and South Korea diversified sourcing toward Southeast Asia, particularly Malaysia and Thailand, boosting demand for ADC12 secondary aluminum alloy. This shift supported both Southeast Asian FOB prices and Japan CIF prices. In April, continued conflict escalation drove additional demand from India, with SMM data indicating several thousand tonnes of incremental enquiries and transactions in Southeast Asia. SMM began tracking ADC12 FOB prices in Thailand and Malaysia in March 2026. Prices rose from $3,000/mt on March 2 to $3,365/mt by April 27, marking an increase of $365/mt. Market activity remained robust, with strong exports to Japan, South Korea, and India, alongside steady shipments to China, Singapore, and other regions. Some producers have reportedly secured orders through late June to July. On the raw materials side, rising LME aluminum prices pushed both imported and domestic scrap prices higher. In Thailand, aluminum cable scrap reached THB 115,000–120,000/mt ($3,560–3,710/mt) in April, significantly increasing blending costs for billet producers. As scrap prices climbed, some billet producers reduced scrap usage and increased reliance on primary aluminum. Meanwhile, higher prices for Tense scrap led to reduced trading volumes, prompting ADC12 producers to substitute alternative scrap types, including higher-copper materials, to optimize cost structures. Reduced scrap supply from the Middle East also intensified competition, particularly as India increased procurement from alternative markets, tightening supply and driving prices higher in Southeast Asia. [Outlook] The Middle East conflict has fundamentally reshaped aluminum trade flows across Asia and globally, increasing pressure on Southeast Asia’s aluminum processing sector. If the conflict persists, global aluminum trade is likely to become more regionalized, with tighter raw material availability in Asia and stronger internal circulation in Western markets. China may emerge as a key balancing supplier, as widening domestic-international price spreads could open export arbitrage opportunities for semi-finished aluminum products and secondary alloys. However, Southeast Asia may face mounting pressure from raw material shortages and intensified competition, particularly from India. At the same time, tightening low-carbon policies and Western supply chain reshoring may further challenge regional competitiveness. Conversely, a de-escalation of the conflict and normalization of logistics routes could ease supply constraints, potentially placing downward pressure on aluminum product and secondary alloy prices, gradually returning the market toward pre-conflict conditions. [Notes] The “18 Middle Eastern countries” referenced in this report include: Gulf Cooperation Council (GCC): Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman, Bahrain Levant region: Israel, Jordan, Lebanon, Syria, Palestine Other key regional countries: Iran, Iraq, Turkey, Egypt, Cyprus, Libya, Yemen Primary aluminium and related key aluminium products include the following HS codes: 7601 – Unwrought aluminium 7604 – Aluminium bars, rods and profiles 7605 – Aluminium wire 7606 – Aluminium plates, sheets and strip, thickness > 0.2 mm 7607 – Aluminium foil 7608 – Aluminium tubes and pipes

[SMM Aluminum Express News] Alvance British Aluminium has boosted output by ~10% at its Lochaber smelter in Fort William, Scotland (UK’s only primary aluminium plant), thanks to recent US tariff changes. The GFG Alliance-owned facility (48,000 tpy capacity, hydro-powered) now exports about half its production to the US for the first time. Managing Director Tom Uppington: “We increased production in response to shifting trade flows after US tariffs, entering the US market while serving UK and European customers.” President Trump set a 50% global tariff on steel/aluminium imports, but the UK secured a preferential 25% rate (vs. 50% for Canada), making UK metal more competitive. The US still relies on imports for automotive and aerospace sectors.

As voices from aluminium associations across US trade-allied nations grow louder, one consensus is becoming clear that the United States’ decision to increase tariffs on aluminium imports to 50 per cent is unlikely to benefit its global partners.

[Global Aluminium Producer Cuts Premium Offer to Japan Amid Weaker Market Outlook] A major global aluminium producer has proposed a premium of US$145 per metric ton for primary aluminium shipments to Japan for July–September 2025, marking a 20% reduction from the US$182 per ton agreed for the previous quarter, according to sources involved in negotiations. The reduced offer reflects weaker demand sentiment driven by concerns over U.S. tariffs and increased supply into Asia, particularly from the Middle East, as European premiums decline. Japanese buyers, who help set the regional benchmark, view the new offer as too high, noting that current spot premiums are down to US$110–US$120, with buyer expectations closer to US$100–US$110. Aluminium inventories at Japan’s three main ports rose to 320,300 tons at the end of April, up 3.4% month-on-month, indicating a looser supply-demand balance. Pricing talks, involving suppliers such as Rio Tinto and South32, began last week and are expected to continue through June.

Emirate Global Aluminium’s recent announcement of setting up a primary aluminium smelter in Oklahoma, close to the Tulsa Port of Inola, is going to be the first new primary aluminium plant built in the US in 45 years.

[Aluminium Dunkerque inaugurates €13 million recycling furnace] On May 2025, Aluminium Dunkerque officially launched a €13 million melting furnace, known as Furnace 8, dedicated to aluminium recycling. The new unit will process 7,000 tonnes of aluminium scrap annually and deliver 20,000 tonnes of low-carbon metal, cutting CO₂ emissions per tonne of ingots by 10%. This equates to 25,000 tonnes of CO₂ and 96 GWh of electricity saved each year. The installation also created eight new jobs. Furnace 8 incorporates advanced technologies such as oxy-fuel burners and a closed-loop industrial water system, boosting environmental performance. With a capacity of 10 tonnes per hour, the furnace strengthens France’s domestic recycling capacity and supports industrial decarbonisation, especially in the automotive sector. Aluminium Dunkerque, France’s last major primary aluminium smelter, produces 300,000 tonnes of aluminium annually for use in automotive, defense, transport, and packaging industries.

[Ma’aden Reports 48% Increase in Flat Rolled Aluminium Production] Saudi Arabian aluminium producer Ma’aden reported a 48% year-on-year increase in flat rolled products (FRP) output for Q1 2025, reaching 72kt compared to 57kt in Q1 2024. Alumina production rose by 9% to 478kt, and primary aluminium output grew slightly to 249kt from 246kt. The aluminium business unit, encompassing aluminium, alumina, and FRP, generated SAR2.71 billion ($722.5 million) in revenue, down 9% from the previous quarter. The company forecasts full-year primary aluminium production between 850kt and 1150kt, and FRP output between 250kt and 310kt. EBITDA increased 4% quarter on quarter, driven by stronger aluminium and FRP prices. FRP sales volumes rose 26% year on year. Ma’aden noted that proposed US tariffs are expected to have limited direct financial impact but may cause short-term trade disruptions. The company emphasized its globally competitive cost structure and plans to closely monitor developments.

[Ma’aden Reports Surge in Flat Rolled Aluminium Production] On May 8, 2025, Saudi Arabian aluminium producer Ma’aden reported a 48% year-on-year increase in flat rolled products (FRP) output for Q1, reaching 72kt compared to 57kt in Q1 2024. Alumina production rose 9% to 478kt, and primary aluminium output edged up 1% to 249kt. Despite a 9% drop in aluminium business unit revenue to SAR 2.71 billion ($722.5 million) from the previous quarter, EBITDA rose 4% quarter-on-quarter, supported by stronger FRP and aluminium prices. FRP sales volumes grew 26% year-on-year, aided by improved pricing. Ma’aden expects to produce 850–1150kt of primary aluminium and 250–310kt of FRP in 2025. The company noted that proposed US tariffs would have limited direct financial impact but could temporarily disrupt trade flows. It emphasized its competitive cost structure and diversified customer base, and said it would monitor developments closely.

On Thursday, April 24, 2025, US President Donald Trump signaled a possible easing of trade tensions with China, boosting market sentiment. As a result, aluminium price has grown in India by 1.32 per cent to INR 234.5 (USD 2.75).

For the past two decades, China has dominated the global aluminium landscape with unparalleled force.