US aluminium buyers hunt for alternatives as Iran war upends global supply
The Middle East supply turmoil comes at a particularly fragile moment for American aluminium consumers
Published Sat, Mar 7, 2026 · 03:27 PM
[NEW YORK] Aluminium buyers in the US are rushing to secure alternative supplies from Asia as the war on Iran disrupts a major foreign source, a development that threatens to hike the cost of the metal used in auto parts, appliances and beverage cans.
An effective halt on shipments through the Strait of Hormuz has already prompted two top producers in the region, Qatar and Bahrain, to suspend deliveries to customers. The US relies heavily on imports, with the Middle East supplying nearly a fifth of its aluminium last year, according to government data.
Andy Massey of Bonnell Aluminum said the company, which molds aluminium into shapes that can be used in products including cars and construction materials, is looking to source the metal from markets such as India and Australia. The Georgia-based manufacturer may even tap the domestic market for near-term deliveries if there’s metal that is not tied up in annual contracts.
“We are all scrambling to figure out what’s happening on the ground” in the Middle East, said Massey, Bonnell’s vice-president of metals, procurement and transportation. “I need to find alternative supplies over the next two days – fast – and make sure we don’t overpay.”
The Middle East supply turmoil comes at a particularly fragile moment for American aluminium consumers. They have already been squeezed by US President Donald Trump’s import tariffs on the metal, which have driven up domestic prices and constrained flows from Canada, the largest foreign supplier to the US. Even brief interruptions to the supply of aluminium, prized by manufacturers for its abundance and low cost, can cause chaos for factories that tend to buy it on a just-in-time basis.
RM-Metals, a New Jersey-based supplier of speciality metal products, is facing a quandary similar to Bonnell’s. It’s seeking alternative sources as some of its shipments remain stuck in Dubai, according to vice president Sam Desai.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
“Korea is a great option right now,” said Desai, adding that his firm is also looking at supplies from northern Europe. “It’s becoming very hard because the cost of aluminium itself has gone up” since the Iran war started.
Prices of the lightweight metal traded on the London Metal Exchange soared to the highest since 2022 this week. The so-called US Midwest premium – the amount added to global benchmarks to deliver aluminium to that region – climbed to a fresh record of US$1.075 a pound. Before the Iran crisis, American manufacturers were already paying among the highest aluminium prices worldwide due to Trump’s 50 per cent tariffs.
While aluminium from India is the most likely seaborne replacement for American consumers, shipping it across the Pacific takes about 60 days, according to Jean Simard, chief executive officer of Aluminium Association of Canada. Other alternatives include Brazil, Indonesia, Iceland and Norway, said Timna Tanners, an analyst at Wells Fargo Securities.
Meanwhile, shipments from Canada, the most obvious alternative for US buyers, have continued to decline under Trump’s tariffs. Producers there have increasingly favoured Europe, where net returns have been more attractive than selling into the US market. At the same time, expectations that the levies could be eased or repealed in the coming months have made US buyers wary of locking in large volumes, for fear of overpaying if the tariffs are later rolled back.
It could be “a timely moment to review” the US tariffs on Canadian aluminium, Simard said. Those levies, which fall under a law that allows duties on certain sectors to protect national security, were not affected by the recent Supreme Court decision that struck down other Trump tariffs.
About six million tonnes of primary aluminium, metal that has not yet been recycled, is now stranded in the Middle East, according to Simard. There is about 30 days’ supply of alumina, the raw material used to make aluminium, left for most smelters in the region, he said.
As the Iran crisis persists, aluminium producers in the Gulf region may have to curtail production as the near-shutdown of the Strait of Hormuz means they may soon run out of alumina. Those output cuts would have a sustained impact on global supply.
The regional conflict is likely to worsen a global aluminium deficit this year, according to Bank of America.
“Given the Middle East accounts for around 9 per cent of global production and supply is at risk, we have raised our shortfall forecast to 1.5 million tonnes from one million tonnes,” analysts at the bank led by Michael Widmer said in a note Thursday.
Some suppliers are already going offline. Qatalum, jointly owned by Qatar’s state-owned aluminium producer and Norway’s Norsk Hydro, said on Tuesday that it started a controlled shutdown of output because of a natural gas shortage, adding that a full restart could take six to 12 months.
“This could just be the tip of the iceberg. There could be more smelters affected, in which case this magnifies the impact,” said Tanners. “Aluminium smelters need to run full out – if not, they are just going to shut. This isn’t a quick fix.” BLOOMBERG
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
