Morgan Stanley: Attacks in the Middle East tighten the aluminum market, with prices up 18% year-to-date

LootboxPhobia · 2026-04-01T22:49:18+00:00

Morgan Stanley reports that attacks in the Middle East have led to the shutdown of smelting plants in the UAE and Bahrain, reducing annual capacity by 2.4 million tons, further tightening the aluminum market. If confirmed, global supply will be affected by 4%. Aluminum prices have already risen by 18%, but inventories remain high.

LootboxPhobia

2026-04-01 22:49:18

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Investing.com – Morgan Stanley said reports that attacks over the weekend led major Middle East smelters to halt production, tightening the aluminum market further.

Wood Mackenzie said the attacks caused Global Aluminum Industries’ 1.6 million mt annual capacity smelter in Al Taweelah in the UAE to shut down, and cut Bahrain Aluminium’s 1.6 million mt annual capacity smelter’s utilization rate from 81% previously to 30%. Morgan Stanley said these disruptions will reduce annual capacity by 2.4 million mt, equal to 3.2% of global supply. These companies have not yet confirmed the reports.

Morgan Stanley said that if confirmed, total outages in the Middle East region would reach 3 million mt of annual capacity or 4% of supply, including 0.57 million mt of announced production cuts in the region.

Bloomberg reported that Global Aluminum Industries in the UAE is selling several batches of alumina cargoes shipping from April to June, but the company declined to comment.

Morgan Stanley said these unplanned shutdowns may require a longer restart and recovery period, meaning these capacities could be removed for the rest of this year or longer. Warrant inventory at the London Metal Exchange is 270,000 mt, but Chinese social inventory and aluminum ingot inventories remain at high levels.

Aluminum prices are up 18% year-to-date, with regional premiums in Japan, Europe and the United States rising by more than the London Metal Exchange benchmark price. The copper-to-aluminum price ratio has fallen from 4.3x at the start of February to 3.53x.

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