The world's largest aluminum smelter has begun cutting production because of the war in Iran

Bahrain-based Aluminium Bahrain (Alba) has begun cutting production at the world's largest single-site smelter due to the blockage of the Strait of Hormuz, Bloomberg reported.

Alba said on March 15 that it has begun a phased shutdown of three production lines, which account for 19% of its 1.6 million tons per year production capacity. The purpose of the shutdown is to optimize the use of raw material stocks and ensure continuity of operations amid the actual closure of the Strait of Hormuz, it said.

After the outbreak of war in Iran and the blockage of the Strait of Hormuz, steel mills in the region faced problems in exporting metals and supplying raw materials and gas. Alba on March 4 declared force majeure after failing to ship products to customers. Qatar's Qatalum aluminum smelter began shutting down production on March 3 due to gas supply disruptions. A few days later, Qatalum announced that it had received guarantees of gas supplies and would operate at 60% capacity.

The Middle East accounts for about a tenth of the world's production of aluminum, the most popular industrial metal after steel, Bloomberg writes. Due to concerns about supply disruptions, the cost of aluminum on the London Metal Exchange soared to the highest level since 2022. Bank UBS in March raised its aluminum price forecast for 2026 by 13% to $3250 per ton, arguing that war-related disruptions could accelerate the already expected shortage of metal on the world market.

This article was AI-translated and verified by a human editor