Aluminum prices have surged to a new high since 2022, as Bahrain Aluminum cites force majeure to suspend partial deliveries.

The conflict between the U.S. and Iran has impacted the global aluminum market, with shipping disruptions in the Strait of Hormuz triggering a supply chain crisis. Traders warn that if tensions are not eased quickly, a wave of large-scale force majeure declarations could soon follow.

According to Bloomberg, Aluminium Bahrain BSC (Alba) has cited force majeure clauses in supply contracts with some customers and suspended metal deliveries. The company officially confirmed this measure on Wednesday. Driven by this news, London aluminum prices saw the biggest single-day increase of 4%, the largest since November 2024, climbing to the highest levels since 2022.

Aluminium Bahrain stated that this force majeure declaration is due to transit disruptions in the Strait of Hormuz and is unrelated to any operational interruption or damage at its smelter facilities. Traders and investors are struggling to assess the short-term and long-term impact of this crisis on the market. According to sources, logistics bottlenecks may soon trigger a broader wave of force majeure declarations, which would result in spot supply shortages for manufacturers in Europe, Asia, and the U.S.

Aluminium Bahrain Announces Force Majeure, Aluminum Prices Reach Four-Year High

Aluminium Bahrain is a major supplier of aluminum in the Middle East, with annual production capacity exceeding 1.6 million tons, making it one of the world's largest single-site aluminum producers. It has long provided stable supplies of primary aluminum to Europe, Asia, and other regions. The current shipping standstill at the Strait of Hormuz has directly hit the company’s ability to deliver abroad.

Aluminum is the most widely used industrial metal after steel, used in automotive parts, home appliances, beverage cans, and window frames. Manufacturers favor aluminum for its abundant reserves and lower costs compared to competing materials such as copper.

However, the aluminum market has experienced cyclical supply shocks in recent years, exposing the fragility of the complex supply network from bauxite mining, alumina refining, to aluminum smelting—many of the highly specialized product forms cannot be quickly replaced.

Strait of Hormuz Disrupted, Supply Chain Crisis Spreads

The Strait of Hormuz has practically ground to a halt, throwing global aluminum traders into chaos. As a critical shipping route, every day of delay creates a chain reaction in the market. Since manufacturers commonly use just-in-time purchasing, even brief interruptions in supply can seriously impact plant operations.

Although former President Trump vowed on Tuesday that the U.S. Navy would escort oil tankers and other commercial vessels through the Strait of Hormuz, traders remain doubtful that transit can resume normal operations quickly. According to Bloomberg, Qatar’s state-owned aluminum producer has been forced to cut output, and the UAE’s largest aluminum supplier is urgently seeking to allocate inventory from outside the region to avoid supply disruptions for customers.

Multiple Supply Pressures Intensify, Market Bets on Further Aluminum Price Rises

This round of geopolitical shocks, combined with existing supply pressures, has significantly boosted confidence among aluminum market bulls. Bloomberg reports that Western markets are facing smelter shutdowns, which have already supported aluminum prices. The shipping disruption at the Strait of Hormuz adds further uncertainty on the supply side.

Against this backdrop, many traders and investors are betting this industrial metal will see even larger price increases, believing the aluminum market is gradually shaking off the long-standing shadow of excess supply.

Meanwhile, other metals are also strengthening. Nickel prices rose 2.2%, as LME warehouse nickel withdrawal applications have climbed to the highest level since last November, indicating a rebound in physical market demand.

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