Geopolitical conflicts stir the aluminum market: an overview of reserves and production capacity

Two of the Middle East’s largest aluminum production hubs were hit by attacks. Combined with disruptions to shipping through the Strait of Hormuz, the global aluminum supply chain has been thrown into turmoil, providing an upside catalyst for aluminum prices.

The aluminum industry chain runs from upstream resources to midstream smelting and downstream processing: upstream bauxite, as the source of the industry chain, means that controlling resources means controlling cost leverage; midstream primary aluminum (electrolytic aluminum) is the key vehicle for aluminum prices, and the scale of production capacity directly determines earnings sensitivity; recycled aluminum, as a low-carbon alternative route, has broad growth potential in the context of the “dual carbon” strategy; downstream aluminum product processing is the value-added end segment, deeply tied to high-end manufacturing sectors such as new energy and aerospace.