Iran war weighs on GCC aluminium output in March

Aluminium production in GCC countries declined in March due to the US-Iran war, the International Aluminium Institute (IAI) said on Monday.

Output fell 6 percent last month to an average of 15,963 tonnes per day, down from 16,997 tonnes per day in February, the global trade association for the aluminum industry said in a report.

The war is having an obvious impact on the market, IAI said, adding that the London Metal Exchange prices are now at a four-year high of $3,565 per tonne as a result.

The US-Israeli war with Iran started on February 28. A tenuous ceasefire between has been in place since April 8, but Washington and Tehran have blocked transit through the Strait of Hormuz.

Most smelters are drawing down their raw-material stocks as the closure of the Strait of Hormuz cut off bauxite and alumina supplies. Three IAI members have announced production cuts following attacks on their smelters or energy infrastructure.

In early March, two of the GCC’s largest aluminium producers – the UAE’s Emirates Global Aluminum (EGA) and Aluminum Bahrain (Alba) – were hit by Iranian strikes. 

EGA has said preliminary assessment indicates it will take at least 12 months to restore production at its Al Taweelah smelter, one of the world’s largest.

Alba declared force majeure on March 4 after the effective closure of the Strait of Hormuz prevented shipments to customers and disrupted inbound supplies of alumina, a key feedstock.

Force majeure is a mechanism enabling a party to terminate or suspend a contract due to an unexpected and exceptional event, without being liable for damages.

The IAI said the impact of the war will continue to worsen on aluminum production.

“Even after an orderly shutdown, restarting a potline can take weeks or months, so supply chains may need many months to normalise. For facilities that sustained damage, recovery will take longer still.”

The GCC’s aluminium sector produced about 6.5 million tonnes in 2025, or 9 percent of global capacity. However, it represents around 15 percent of imports into the European Union and 20 percent into the US.

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The institute said that reopening the strait is essential to allow producers to restock raw materials and export finished products that have been largely stranded at smelters. 

“This is now having a knock-on impact on supply chains extending as far as Australia, which supplies alumina to some of the Gulf smelters,” the IAI said.

More than 20 percent of the world’s oil and gas supplies pass through the narrow Strait of Hormuz.