Charles Johnson, President and CEO of the Aluminum Association, addressed the ripple effect of the Middle East conflict on the aluminium industry. According to him, global aluminium markets are under the pressure of “elevated” prices as geopolitical tensions in the Gulf region disrupt supply chains.
While the situation has spurred short-term uncertainty with the “closure of the strait”, the industry is continuously adjusting through alternative sourcing, recycling and shifting trade flows.
Supply chains adjust, but gaps remain
In response to the logistical constraints around the Gulf region, as well as the supply crunch due to the disruptions surrounding 9 per cent of global aluminium smelting capacity, the US-based manufacturers are actively diversifying sourcing strategies.
Supplies from regions such as Canada are helping mitigate the supply squeeze for bulk aluminium demand. Johnson said that “most American producers are reaching for other sources of global smelted aluminium.”
However, alternatives have not yet emerged for all the segments. The CEO referred to “some very specific extrusion billets that are going to be harder to source,” adding that such “supply chain adjustments are going to take longer and be a little bit more severe.”
Direct impact on facilities raises concern
Beyond logistics, recent military activity targeting industrial sites has added another layer of risk. “We did see two aluminium facilities directly targeted for military action, and that’s very concerning for us,” Johnson noted.