The largest aluminum producer in the United States, Alcoa (AA.US), has indicated that it is receiving significant procurement interest as buyers seek alternative sources following production cuts at aluminum plants in the Middle East. The company's Chief Financial Officer, Molly Beerman, stated during a conference hosted by JPMorgan on Tuesday that there has been a noticeable rise in customer orders, along with increased inquiries for the second quarter and the latter half of the year. Many of these customers had previously relied on Middle Eastern smelters for part or most of their aluminum supply. As a result, Alcoa is now receiving additional spot orders, which are expected to positively impact the company's performance in the second half of the year.

Amid ongoing disruptions to shipping through the Strait of Hormuz, aluminum buyers are actively looking for alternative suppliers. The Gulf region accounts for approximately 9% of global aluminum production, and in an effort to conserve raw materials, local smelters began reducing output last week and over the weekend. Beerman also noted that Alcoa, which is also a major producer of alumina, typically ships around 4 million tons of this raw material annually to the Middle East for use in local smelters. However, following the closure of the Strait of Hormuz, these shipments are being redirected to other markets, with China likely being a primary destination.

Earlier, aluminum prices surged to their highest level since 2022 after the United States and Israel conducted strikes against Iran, though prices have since moderated. The U.S. Midwest premium—an additional charge on the benchmark price for delivering aluminum to the region—climbed to a record high of $1.10 per pound last week.