Middle Eastern production "cut off supply"! Can aluminum prices continue to soar?

On Monday (March 30), the metal aluminum sector surged, with multiple stocks such as Lifang Shares, Yiqiu Resources, Changlü Shares, Nanshan Aluminum, and others hitting the daily limit. Yunlü Shares, Yinbang Shares, and Mingtai Aluminum, among others, also rose strongly in follow-through.

On the news front, according to Xinhua News Agency, on March 29 the Islamic Revolutionary Guard Corps issued a statement saying that the Revolutionary Guard Corps “effectively” struck aluminum plants in the UAE and Bahrain linked to the United States using missiles and drones. The statement said that these two aluminum plants are related to U.S. military and aerospace industries: the UAE plant is the facility of Global Aluminum Industries Company, and the Bahrain plant is the facility of Bahrain Aluminum Industries Company.

Separately, according to the Shanghai Securities News, the two aluminum enterprises that were hit are both major “aluminum producers” in the region, and together their production capacity exceeds 6% of the global total production capacity.

Global Aluminum Industries Company (EGA) is jointly held by an investment company from the UAE and an investment company from Dubai. The company’s website says that its aluminum output accounts for 4% of the global total, and it nearly dominates about half of the aluminum production in the Gulf region.

Bahrain Aluminum Industries Company, the other aluminum firm that was attacked, has production capacity of 1.623 million tons in 2025, accounting for about 2.19% of the global total production capacity.

Beyond the “cutoff of supply” of Middle East capacity that sparked the aluminum sector concept stocks. On the demand side as well, there are supportive factors. In a research report, CITIC Securities said that demand in four major emerging areas is expected to support the staying power of growth in electrolytic aluminum.

First is aluminum for energy storage. Global energy storage is entering an accelerated development period, and forecasts for 2026-27 indicate an aluminum incremental increase of 470/410 thousand tons for energy storage batteries.

Second is air conditioners using “aluminum instead of copper.” With the introduction of policies combined with the signing of industry self-discipline agreements, aluminum replacing copper is expected to speed up, with forecasts for 2026-27 indicating an aluminum incremental increase of 160/150 thousand tons for air-conditioning use.

Third is aluminum for the power grid. China’s power grid investment growth is expected to pick up, with forecasts for 2026-27 indicating an aluminum incremental increase of 460/380 thousand tons for power-grid use.

Fourth is aluminum for automobiles. Production and sales of automobiles and new energy vehicles are expected to continue improving, with forecasts for 2026-27 indicating an aluminum incremental increase of 330/530 thousand tons for automotive use.

CITIC Securities said that looking ahead to 2026, it expects that aluminum for power grids and automobiles will maintain high levels of enthusiasm, while aluminum for energy storage and air-conditioning “aluminum instead of copper” growth is expected to accelerate, supporting the staying power of demand growth for electrolytic aluminum. At the same time, the trend remains that the industry’s supply growth rate is moving lower, and signs of disruptions are gradually becoming visible. It expects the aluminum price’s midpoint in 2026 to reach 23,000 yuan per ton, and it continues to be bullish on a situation in which aluminum-sector profits and valuations rise together.

（Source: Oriental Fortune Research Center）