Two major aluminum giants in the Middle East are attacked, causing 6% of global production capacity to be at risk.

Will geopolitical risks permanently change the aluminum market landscape?

According to Xinhua News Agency, two large aluminum plants in the Gulf countries of Bahrain and the United Arab Emirates recently confirmed that they were attacked by Iran. The attacks caused injuries and property damage. Aluminum products exported from the Middle East account for about 10% of global supply, which may have a certain impact on the market.

This photo taken in the early morning of March 28 shows smoke after an explosion in the city of Tehran, Iran. Photo by Xinhua reporter Shadati

Bahrain Aluminum Company stated on the 29th that its plant was hit by Iranian forces on the 28th, resulting in two minor injuries, and the company is assessing property damage. This company and its parent company previously declared “force majeure” due to shipping disruptions in the Strait of Hormuz, resulting in a production reduction of about 20%.

Emirates Global Aluminium also confirmed on the 28th that it was attacked by Iranian forces, with significant damage to a plant located in the Abu Dhabi industrial area, and several Indian and Pakistani workers were injured. The company announced on March 28 local time that its Tawiila plant suffered significant damage in the Iranian attack on the Khalifa Industrial Area in Abu Dhabi, and damage assessment is still ongoing. The Tawiila smelter produced 1.6 million tons of casting metal in 2025.

According to Shanghai Securities Journal, the two affected aluminum companies are major local aluminum producers, with a combined production capacity exceeding 6% of global total capacity.

In fact, geopolitical friction in the Middle East has disrupted aluminum metal supply in the region, causing aluminum prices to initially rise and then fall. As of the market close on March 27, the COMEX aluminum main contract settled at $3,180 per ton, LME aluminum futures closed at $3,284.5 per ton, and Shanghai aluminum was priced at 24,085 yuan per ton, with slight increases recorded on that day.

Looking ahead, Gu Fengda, chief analyst at Guosen Futures, stated that even if the situation eases in the future, resuming production will not be easy; it requires a long process of equipment maintenance, safety assessments, and capacity ramp-up, which often takes longer than 6 to 12 months, and necessitates stable power supply, sufficient raw material supply, and long-term geopolitical security as essential prerequisites.

“However, the risk of permanent damage to Middle Eastern production capacity gives aluminum a core driving force to detach from the sector and strengthen independently.” Gu Fengda believes that the focus of Shanghai aluminum prices will gradually rise in the second quarter, and the core operating range for Shanghai aluminum main contracts is expected to shift to 23,000 to 26,000 yuan per ton this year.

(Disclaimer: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk based on this.)

Compiled from Xinhua News Agency, 21 Finance Client, Shanghai Securities Journal

Produced by 21 Finance Client 21 News Studio