LME aluminium surged to $3,676/t in late May 2026, the highest since March 2022, driven by Gulf region tensions. Strait of Hormuz disruption threatens operations at Emirates Global Aluminium and Aluminium Bahrain.
LME inventories fell from 414,000t in early April to 349,100t by mid-May, a 14.7% drawdown. Backwardation at $60/t over three-month contracts signals acute nearby tightness.
SHFE aluminium reached CNY 24,865/t. China's 45Mt capacity cap prevents domestic producers from filling the Gulf supply gap.
Multiple constraints hit simultaneously: European energy-driven curtailments, sanctions on Russian metal, Chinese capacity limits, and now Gulf disruption.
Buyers with Middle East-origin metal exposure should diversify sources. Backwardation penalizes short-dated purchasing, making longer-term contracts with fixed premiums more attractive.
Buyers with Middle East-origin metal exposure should diversify sources. Backwardation penalizes short-dated purchasing, making longer-term contracts with fixed premiums more attractive.