Iran launched attacks over the weekend on the two largest aluminium smelters in the Middle East, striking key suppliers to the United States, which relies heavily on imported aluminium due to limited domestic production. Previously, disruptions linked to the Iran conflict focused on shipping challenges through the Strait of Hormuz, which Tehran has effectively closed. However, the recent assaults have escalated concerns from temporary transport issues to significant threats against regional aluminium production.
On Saturday, Emirates Global Aluminium (EGA) announced that its Al Taweelah facility in Abu Dhabi, with an annual capacity of approximately 1.5 million metric tons, suffered substantial damage from Iranian attacks. Aluminium Bahrain (Alba), operating a 1.6 million ton per year plant, was also targeted the same day. Neither company has provided updates on their operational status since the incidents. This shift in the nature of risk was highlighted by Paul Adkins, head of aluminium consultancy AZ Global, who emphasized the severity of losing such production capacity.
The London Metal Exchange reacted sharply on Monday, with aluminium prices surging 6% to $3,492 per ton, nearing a four-year peak. Analyst Tom Price from Panmure Liberum noted that removing 3 million tons of capacity from the market is irreplaceable in the short term, intensifying supply concerns.
Aluminium, essential in automotive manufacturing and packaging, is listed among the 60 critical minerals by the U.S. government. The United States depends on imports for 60% of its aluminium needs, producing only 660,000 tons of primary aluminium domestically in 2025—less than half the output of Alba alone. Last year, the U.S. imported 3.4 million tons of primary and alloyed aluminium, with nearly 22% sourced from the Middle East. The UAE and Bahrain, home to EGA and Alba respectively, rank as the second and fourth largest aluminium suppliers to the U.S., together accounting for over two-thirds of the Gulf’s aluminium production.
Iran justified the attacks by claiming that both EGA and Alba have ties to U.S. military industries, following Israeli strikes on Iranian steel plants. However, analysts remain skeptical about these assertions. Uday Patel, senior research manager at Wood Mackenzie, pointed out that any connection to the U.S. military is indirect, as aluminium may eventually be used in defense applications after multiple processing stages. Wood Mackenzie estimates that U.S. defense sectors consume around 450,000 tons of aluminium annually, but Price suggested that most military aluminium is sourced from Canada.
Despite the uncertainty over direct military impact, the targeting of Gulf aluminium production by Iran and the potential escalation of conflict are already affecting the U.S. and other major economies. StoneX analyst Natalie Scott-Gray noted that industrial activity is beginning to feel the strain, complicating planning amid already high levels of uncertainty.
