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| LME Aluminium |
Strait of Hormuz Disruption Impacts Global Aluminium Logistics
The Middle East conflict threatens global aluminium logistics through the Strait of Hormuz.
Regional producers report port delays, and shipping lines have suspended operations amid escalating tensions.
European and US aluminium premiums rose last week, reflecting supply concerns.
Meanwhile, Latin American markets, especially Mexico, face risks due to heavy import dependence.
Mexico’s Vulnerability and Rising Premiums
Mexico imports nearly 825 million kg of unwrought aluminium from GCC countries, representing 24.7% of total imports.
Consequently, disruptions in UAE, Bahrain, Qatar, and Saudi Arabia directly affect costs for Mexican buyers.
Premiums for P1020A aluminium in Mexico increased to $310-360 per tonne, while 6063 extrusion billets reached $380-430.
As a result, traders predict further rises, potentially reaching $700 per tonne if disruption persists.
LME Prices, Strategic Stockpiling, and Market Outlook
The London Metal Exchange aluminium price surged nearly 10% due to Gulf supply risks.
Analysts warn that low global inventories amplify sensitivity to logistical and operational disruptions.
Producers explore stockpiling at Jeddah and Sohar ports to mitigate export delays, though capacity is limited.
Therefore, price trajectories will depend on conflict duration, export constraints, and speculative risk premiums.
ScrapInsight Commentary
The Middle East conflict underscores aluminium’s geopolitical vulnerability and Mexico’s import reliance.
Stockpiling and diversified sourcing could moderate premiums, yet tight inventories amplify price volatility.
Recycling and secondary aluminium markets will be increasingly critical for regional supply resilience.
