"The largest aluminum plant in the Middle East suffered 'major losses' on Saturday; it is not yet clear whether 'production has stopped.'"

The largest aluminum plant in the Middle East has been attacked, once again disrupting the global aluminum supply chain.

According to Xinhua News Agency, Iran's Islamic Revolutionary Guard Corps issued a statement on the 29th, saying that the Revolutionary Guard used missiles and drones to "effectively" strike aluminum plants in the UAE and Bahrain associated with the United States. The statement declared that these two aluminum plants are connected to the U.S. military and aerospace industries, specifically the factories of Emirates Global Aluminum in the UAE and Bahrain Aluminum Company in Bahrain.

On March 28, Emirates Global Aluminum (EGA) stated that its core smelter in Abu Dhabi was damaged by an attack amid the Middle East conflict, further intensifying tight supply conditions in the global aluminum market. The UAE is a major supplier in the global market, and EGA operates the country’s largest metal processing plant.

In its statement, EGA said it is assessing the damage at its Al Taweelah facility and confirmed several employees were injured in the attack, but did not disclose whether the facility has ceased operations. Earlier, the Abu Dhabi Media Office reported that fragments of intercepted ballistic missiles caused three fires near the Kezad Industrial Zone, injuring six people.

Aluminum prices were already trending higher before the conflict erupted. This attack has further reinforced market expectations of tighter supply and declining global inventories, and may push aluminum prices even higher. Goldman Sachs pointed out that rising commodity prices will put pressure on the global economy.

Supply Chain Hit Again, Middle East Aluminum Industry in Crisis

This attack dealt another heavy blow to the Middle East’s bulk commodities sector. The Strait of Hormuz is effectively under blockade, preventing the normal export of all kinds of goods from energy to fertilizers. The Middle East accounts for about 9% of global aluminum supply, most of which is currently held up inside the strait.

Besides shipping disruptions, key industrial facilities have been damaged in the attacks. It is expected that even after hostilities end, resuming production and operations will take much longer.

The damaged Al Taweelah smelter is located in Abu Dhabi’s Khalifa Port Industrial Zone, close to the shore of the Persian Gulf. The plant’s metal output in 2025 will reach 1.6 million tons and is one of two EGA smelters—the other is in the Jebel Ali Port Free Trade Zone in Dubai.

EGA stated that at the start of the Middle East conflict, the company already stocked a considerable quantity of metal inventory overseas, and is currently using these products to maintain supply to customers.

As the UAE’s largest non-energy industrial enterprise, EGA is a key participant in the UAE’s plan to invest $1.4 trillion in the United States over the next decade. The UAE was previously the second-largest aluminum supplier to the U.S., just behind Canada, and is constructing the first new aluminum smelter in the U.S. in decades in Oklahoma.

Risk Warning and DisclaimerThe market is risky; investment requires caution. This article does not constitute personal investment advice and has not considered individual users’ specific investment objectives, financial situation, or needs. Users should consider whether any opinions, viewpoints, or conclusions herein are suitable for their particular situation. Investment is at your own risk.