The ongoing Iran War has brought to light a significant vulnerability in the United States' aluminum supply chain, especially concerning its military readiness. The conflict has disrupted aluminum shipments through the Strait of Hormuz, with Qatar and Bahrain, major producers in the region, suspending deliveries. The US relies heavily on imports, with the Middle East previously supplying nearly a fifth of its aluminum, according to government data from last year. This reliance is now exposing the US to supply shocks, leading American buyers to seek alternatives from Asia.
Damage to Emirates Global Aluminium in the UAE and Aluminium Bahrain, two of the region's largest producers, caused by Iranian strikes, has further exacerbated the situation. Aluminium Bahrain had already shut down 19% of its capacity, and inventories in LME-approved warehouses have plummeted by about 60% since May, reaching just 418,675 tons. Annually, over five million metric tons of aluminum transit through the Strait of Hormuz. The interruption of exports from a region that the US depends on for 22% of its imports, combined with a domestic smelter capacity of only 1.36 million tons and primary production of 670,000 tons, underscores America's 47% net import reliance, as detailed in a 2025 US Geological Survey report.
The impact extends beyond commercial markets; defense manufacturers require certified and traceable aluminum for critical systems, unlike commercial buyers who might delay projects or use alternative materials. Although the London Metal Exchange (LME) aluminum prices saw a relatively muted 10% surge, peaking at $3,492 per metric ton, the true strategic risk lies in the shrinking pool of politically and commercially acceptable aluminum. Gulf producers, accounting for 9% of global output, are critical as an export platform, supplying 75% of their production. The closure of Hormuz alone threatens approximately a quarter of the non-Chinese aluminum supply, directly affecting Europe and the US, which import 1.2 million and 3.4 million tons respectively from the region annually.
