By Alex Kozul-Wright

The war in Iran poses a major threat to aluminum supplies. Used in everything from cars to dishwashers, aluminum was already in a structural deficit before the conflict began and a further shortage could have big knock-on effects.

The Middle East accounts for 9% of global aluminum production and meets 18% of world demand, excluding China, according to ANZ. The bank says four-to-five million metric tons of exports are at risk.

"The Middle East has emerged over the past decade as a pivotal production and export hub for aluminum," analyst Soni Kumari said in a research note published Thursday. "The longer the Strait of Hormuz stays closed, the greater the impact [on prices]", she added.

Aluminum forward contracts were up 1.1% early Thursday at $3,181.75 per metric ton in New York. Prices are up 4.5% since Feb. 27, the day before the Iran conflict began.

Alba -- a leading aluminum producer in Bahrain -- declared force majeure, freeing the company from its contractual liabilities, on March 4 due to the conflict, according to multiple sources.

Smelters take time to return to full capacity after closures. As global aluminum prices rise, that should eventually feed through into downstream products.

In the near-term, executives at car parts companies told the Financial Times that car makers were trying to build up contingency inventories amid continued fighting in the Middle East.

Traders in Japan were also reported as saying that the country's auto companies were thinking about securing supplies from Russia, having halted purchases from Russian suppliers since the invasion of Ukraine in 2022.

Asian companies are at the sharp end of disruptions. The price of everything from Korean electronic goods to Indian beer cans may also get a jolt.

The Dow Jones U.S. Aluminum Index closed 3.6% higher on Wednesday. However, industrial mining companies have fared poorly since fighting erupted, on Feb. 28.

Alcoa is down 7.5% over the past month, while Century Aluminum has fallen 3.9% over the same period, possibly on the back of higher energy prices -- a key cost for miners -- linked to the war.

Write to Alex Kozul-Wright at alexander.kozul-wright@barrons.com

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March 26, 2026 09:03 ET (13:03 GMT)

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