Emirates Global Aluminium (EGA), the Middle East’s biggest aluminium producer, has paused some of its supply contracts.

Bloomberg reports this happened after Iranian missiles and drones damaged its main Al Taweelah smelter on March 28.

Gulf Aluminium Crisis Deepens

Force majeure is a legal term (French for “superior force”) that refers to unforeseeable, extraordinary events beyond a party’s control, such as wars, natural disasters, or pandemics, that prevent a party from fulfilling a contract.

When a company “declares force majeure,” it’s essentially telling its customers: “Something catastrophic happened that we couldn’t predict or prevent, so we legally cannot deliver what we promised, and we shouldn’t be held liable for it.”

“The force majeure on some contracts was outlined in documents seen by Bloomberg News,” the outlet reported.

Al Taweelah, located in Abu Dhabi’s Khalifa Economic Zone, ranks among the world’s largest smelters. The Iranian strikes inflicted damage that EGA says could take up to 12 months to repair. 

The move signals a prolonged disruption to a facility that produced 1.6 million tonnes of cast metal in 2025. The attack came in retaliation for US and Israeli attacks on Iranian industrial infrastructure.

“Metal solidified inside the smelting circuits, causing significant damage. The company has said restoration could take up to 12 months,” Drop Site reported. 

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EGA is not alone. Aluminium Bahrain (Alba) shut down three aluminium smelting lines in early March after the closure of the Strait of Hormuz halted shipments. It was also a target of the Iranian strike.

Meanwhile, Qatar’s Qatalum was also forced to halt operations in March after QatarEnergy suspended LNG production following strikes on its energy infrastructure. Together, Gulf producers represent about 9% of global primary aluminium output.

“Aluminium is used in everything from airplanes to food packaging and solar panels, meaning disruptions ripple far beyond the metals market. This is no longer just an energy crisis, it is an industrial one,” Global Markets Investor wrote.

Why This Matters Beyond Commodities

Wood Mackenzie estimates the Middle East conflict could remove 3 to 3.5 million tonnes of aluminium output in 2026 from a global market that produced just under 74 million tonnes last year. London Metal Exchange aluminium prices have surged past $3,500 per tonne, approaching four-year highs. 

Goldman Sachs has warned prices could reach $3,600 if regional production losses persist, while Kpler analysts say further escalation could push prices toward $4,000.

The West Point Modern War Institute described aluminium as a “foundational material” for defense and industrial infrastructure, noting that the US depends on Middle Eastern sources for 22% of its aluminium imports. LME warehouse inventories have fallen roughly 60% since May, leaving minimal buffers against further shocks.

For the broader economy already rattled by surging oil prices, disrupted shipping lanes, and mounting crises tied to the Iran conflict, the aluminium squeeze adds another layer of inflationary pressure. The supply crunch compounds cost pressures on industries from aerospace to automotive manufacturing that rely on Gulf-sourced premium aluminium.

As discussions continue, all eyes remain on whether the ceasefire holds and the Strait of Hormuz reopens fully. The outcome will determine how deep the aluminium deficit grows and how far prices climb in the months ahead.

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Article Source: beincrypto.com

The post Iran War Triggers Aluminium Supply Crisis in the Gulf appeared first on Crypto Adventure.

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Filed under: Bitcoin - @ April 11, 2026 5:29 pm