Europe’s aluminium market is facing fresh pressure as higher energy costs and tightening global supply combine to create a more challenging environment for producers and consumers alike. The disruption to shipping through the Strait of Hormuz has raised concerns over energy security, while reduced aluminium availability outside China has kept physical markets tight and premiums elevated.
The Strait of Hormuz is one of the world’s most important trade routes for oil and liquefied natural gas (LNG). Any disruption to traffic through the waterway quickly feeds into global energy markets, and Europe is already feeling the effects through higher gas and electricity prices. For aluminium smelters, where power is one of the largest operating costs, that creates an additional burden at a time when downstream demand remains weak.
At the same time, the pressure on Europe reflects a broader trend across aluminium markets outside China. According to recent market analysis, the ex-China market remains fundamentally tight, supported by supply disruptions in the Middle East, constrained exports from the Gulf region and low deliverable inventories. Although ceasefire headlines have occasionally triggered short-term price pullbacks, the underlying supply picture remains supportive.
Aluminium prices have held near multi-year highs despite bouts of profit-taking. London Metal Exchange (LME) aluminium rose from around USD 3,480 per tonne at the beginning of May to approximately USD 3,675 per tonne by the end of the month. By June 8, benchmark prices were still around USD 3,595 per tonne, roughly 44 per cent higher than a year earlier.
According to Fastmarkets analyst Andy Farida, energy prices could remain elevated if disruption to shipping through the Strait of Hormuz persists, particularly as Europe enters its summer gas storage and energy restocking season.