Middle East conflict might create supply constraints, raise in aluminium premiums in Mexico

Fastmarkets

Mar 12

Key takeaways: Disruption in the Strait of Hormuz has tightened aluminium supply from the Middle East, pushing premiums higher in major markets, including Mexico, which relies heavily on GCC-origin ...

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One of the best stock trading platforms in Singapore.","ogImage":"https://c1.itigergrowtha.com/portal5/static/media/og-logo.be62fbe1.png","ogUrl":"https://www-web.itiger.com/news/2619157594"},"companyName":"Tiger Brokers"},"pageData":{"isMobile":false,"isTiger":false,"isTTM":true,"region":"SGP","license":"TBSG","edition":"fundamental"},"isCrawlerRequest":true,"__swrFallback__":{"@#url:\"https://stock-news.skytigris.cn/v3/news\",params:#id:\"2619157594\",edition:\"fundamental\",auth_exemption:1,,,undefined,":{"share":"https://ttm.financial/m/news/2619157594?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2026-03-12 12:00","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2619157594","market":"hk","top_or_hot":-1,"title":"Middle East conflict might create supply constraints, raise in aluminium premiums in Mexico","media":"Fastmarkets","content":"<div>\n<p>Key takeaways:\n\nDisruption in the Strait of Hormuz has tightened aluminium supply from the Middle East, pushing premiums higher in major markets, including Mexico, which relies heavily on GCC-origin ...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/middle-east-conflict-might-create-supply-constraints-raise-in-aluminium-premiums-in-mexico/\">Source Link</a>\n\n</div>\n","source":"fastmarkets_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; 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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMiddle East conflict might create supply constraints, raise in aluminium premiums in Mexico\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-03-12 12:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fastmarkets.com/insights/middle-east-conflict-might-create-supply-constraints-raise-in-aluminium-premiums-in-mexico/><strong>Fastmarkets</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Key takeaways:\n\nDisruption in the Strait of Hormuz has tightened aluminium supply from the Middle East, pushing premiums higher in major markets, including Mexico, which relies heavily on GCC-origin ...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/middle-east-conflict-might-create-supply-constraints-raise-in-aluminium-premiums-in-mexico/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IAI","symbol_name":"iShares Dow Jones U.S. Broker De","start_time":0,"source_url":"https://www.fastmarkets.com/insights/middle-east-conflict-might-create-supply-constraints-raise-in-aluminium-premiums-in-mexico/","article_id":"2619157594","we_media_id":null,"thumbnails":[],"rights":{"source":"fastmarkets_highlight","url":"https://www.fastmarkets.com/insights/middle-east-conflict-might-create-supply-constraints-raise-in-aluminium-premiums-in-mexico/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2619157594","pubTimestamp":1773288000,"columns":[],"sourceInfo":{"source_id":"fastmarkets_highlight","name":"Fastmarkets"},"weMediaInfo":null,"summary":"The Mexican aluminium market might be strongly affected by the closure of the Strait of Hormuz, with supply constraints and consequently higher premiums, market participants told Fastmarkets on Tuesday March 10.","collect":0,"end_time":0,"defaultTopTitle":"fastmarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IAI":"iShares Dow Jones U.S. Broker De","BK4582":"ESG ETF-MSCI","BK4535":"淡马锡持仓","GCC":"智慧树连续商品指数基金","XME":"金属与采矿指数ETF-SPDR"},"translate_title":"中东冲突可能造成供应限制，墨西哥铝溢价上升","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"GCC":1,"XME":1.5,"IAI":1},"content_text":"Key takeaways:\n\nDisruption in the Strait of Hormuz has tightened aluminium supply from the Middle East, pushing premiums higher in major markets, including Mexico, which relies heavily on GCC-origin metal.\nGCC smelters, key swing suppliers, face logistics constraints and force majeure declarations, helping drive a sharp rise in LME aluminium prices.\nWith global inventories low and rerouting options limited, any prolonged disruption could quickly tighten supply further and increase price volatility.\n\nStrait of Hormuz disruption hits aluminium logistics\nThe Strait of Hormuz is the only maritime passage connecting the Persian Gulf to the Indian Ocean, and has become the focal point of the tensions between Iran and the US and Israel, affecting logistics. \nRegional aluminium producers have notified customers of port disruptions and delayed deliveries, while shipping lines have suspended operations in the region.\nEuropean and US primary aluminium premiums were up last week amid supply concerns.\nLatin American markets are facing risks\n“This will affect Latin America,” a producer source said, “because many shipments that would [in normal circumstances] go to Latin America will end up being diverted to Europe, the US or even Asia because of the higher premiums that are already [in use] in those regions.”\nMexico might be the most badly affected market in Latin America, market sources told Fastmarkets. The country does not engage in primary aluminium production due to the absence of domestic ore reserves, so it relies on imports.\nMexico’s heavy dependence on gulf aluminium\nData from the Mexican government from 2024 showed that the countries with the most international sales of unwrought aluminium (HS7601) to Mexico were the United Arab Emirates, followed by the US, South Africa, Canada and India.\nAccording to more recent data gathered by Global Trade Tracker, from January 2024 to February 2026, Mexico imported almost 824 million kg of unwrought aluminium (HS7601) from producers in the Gulf Cooperation Council (GCC) – specifically, the UAE, Bahrain, Qatar and Saudi Arabia – from the total of 3.3 billion kg imported, representing around 24.7%.\n\nBahrain: 303,976,740kg\nQatar: 99,776,507kg\nSaudi Arabia: 2,497,074kg\nUnited Arab Emirates: 417,674,126kg\n\n“From the shares analysis point of view, we can see much higher reliance on alloyed products [PFA + billet],” Fastmarkets analyst Kirstine Veitch said.\n\nPremiums rising fast\n“I see a strong effect on Mexico,” a trader source told Fastmarkets.\n“A lot of primary aluminium comes from the Middle East, mainly billet and PFA. Premiums might go higher, mainly billet, potentially getting to $700 per tonne in the coming weeks. The consequences [will be seen] directly in the cost. Even for those who have contracts, the majority of contracts are quarterly, not yearly. So, it’s not like there is a lot of inventory, [so] it will be affected anyway. I do not know what the solution will be: [perhaps] importing from other regions,” he added.\n“Premiums in Mexico are already being affected. We are already seeing it go higher,” a second Mexican trader source said, who was seeing billet premiums already $70-80 per tonne higher than before.\nOn social media, Mauricio Ricardo Osorio Montero, founder and partner at Century Recycling and Fundiciones Gardos, wrote: “Mexico operates in technical balance, but the geopolitical component introduces a risk of volatility in energy and premiums. Inventory management and indexed contracts will be key in the coming weeks.”\n“I think eventually, being a country that relies on imported units, this turmoil is going to affect Mexico,” a third trader source said, “but it might be too early to say. When people ship to Mexico, they ship higher quantities, so might be happy to sell at current levels. But if the situation does not change for weeks and months, it’s another point of concern about how to replace the units in this environment.”\nFastmarkets assessed the aluminium P1020A premium, cif Mexico, at $310-360 per tonne on March 10, up by 3.08% from $300-350 per tonne on February 24.\nThe fortnightly aluminium 6063 extrusion billet premium, cif Mexico, was assessed at $380-430 per tonne on March 10, up by 2.53% from $370-420 per tonne on February 24.\nLondon Metal Exchange prices\nGCC member states produced around 6.16 million tonnes of primary aluminium in 2025, around 8.35% of global supply, according to the International Aluminium Institute (IAI).\nMarket participants view GCC production as a key “swing supply” because the region’s smelters can export to Europe, the Americas and Asia whenever those markets offer the best premiums.\nQatalum and Aluminium of Bahrain (Alba) have already issued force majeure notices on March 3 and March 4, respectively.\nLME aluminium prices surge on supply fears\nThe three-month aluminium price on the LME finished the week to March 6 up by almost 10%.\nAccording to Ewa Manthey, commodities strategist at banker ING, Middle East escalation could push the aluminium price above $4,000 per tonne, because aluminium was likely to be one of the most badly affected industrial commodities due to the concentration of export-oriented smelting capacity in the Gulf region.\n“We have revised our aluminium price forecasts higher while rising conflict in the Middle East introduces fresh upside risks to an already tightening market. The Gulf accounts for roughly 9% of global aluminium production and an even larger share of internationally traded metal,” Manthey said.\n“Yet the region produces only around 3% of global alumina and around 1% of bauxite, leaving smelters heavily reliant on imported raw materials. Extended disruption in the Strait [of Hormuz] would simultaneously choke alumina inflows and aluminium exports for Middle Eastern smelters. That would tighten global supply meaningfully,” she added.\nAnalysts raise price forecasts amid high uncertainty\n“To be clear,” a Goldman Sachs report released on March 3 said, “our base case remains that [the price of] LME aluminium will average $3,150 [per tonne] in the first half 2026 while the situation remains uncertain. We expect new Indonesian supply to ramp-up in the second half of the year, raising global visible inventories and reducing the risk premium.”\nFastmarkets analyst Yang Cao said that LME aluminium was firmly in bullish territory and was likely to maintain an upward momentum on headline-driven supply risks.\n“With Qatalum already offline, the risk profile for other key GCC producers has increased,” Cao said. “Any further disruption across these smelters would tighten the supply outlook even more, and provide additional fuel for the current rally. Our forecast of the LME aluminium price for the first quarter of 2026 is now $3,155 per tonne, which brings our full-year forecast for 2026 to $3,073 per tonne. Our annual average forecast for 2027 is $2,966 per tonne.\n“While the overall context is that supply of aluminium in the region will be disrupted, this is very bullish for the light metal price as well as the regional premiums that we follow. But such a rally is often unsustainable, and runs the risk of a stronger correction after the upside move has completed its course,” he added.\nLogistical workarounds and stockpiling options\nThe producer source highlighted that there cannot be a very abrupt cut, so within two weeks it will have to make a decision if the closure of the Strait of Hormuz persists.\nJeddah in Saudi Arabia and the Port of Sohar in Oman are becoming tactical workarounds for base metal exports blocked by the Strait’s closure, though capacity constraints and elevated logistics costs limit availability.\nShould aluminium smelters be unable to move metal out of the region via the traditional Strait of Hormuz route, they could consider stockpiling units at nearby ports, assuming those facilities remained secure and were not targeted, Cao said.\nTight aluminium inventories amplify price sensitivity\n“Current global aluminium inventories remain relatively low, leaving the market with limited capacity to absorb supply shocks,” he added. “Exchange inventories and off-exchange stocks have been declining over the past year while demand stabilized and production growth was constrained in several regions.\n“Under these conditions, the aluminium market exhibits heightened price elasticity. With inventories unable to provide a meaningful buffer, any supply shock from the Middle East could rapidly tighten the global aluminium balance,” Cao said.\nBrian Hesse, chief executive officer of Adaptiq LLC and PerenniAL, highlighted on social media that companies operating on spot or short-term contracts, those with concentrated supplier bases, or limited hedging, faced the greatest risk of both price spikes and physical shortages\n“In an industry already navigating tariffs, energy volatility and the energy transition,” he wrote, “this is a stark reminder that geopolitical risk is now a core supply-chain variable. Those with long-term relationships across diversified producing regions are better positioned, but proactive review of contracts, hedging strategies and inventory buffers is essential for everyone.”\n“We do not see much activity,” a trader source said, “but there’s a lot of tension in the air. It’s very uncomfortable, so uncertain. People do not know what’s going to happen, [or] how long this will last. Everyone is concerned about oil, based on the first headlines that come up, but the aluminium market is quite sensitive to this as well.”\nKey drivers that could push prices higher\nIn Cao’s opinion, overall, the trajectory of aluminium prices will be closely tied to the duration and intensity of the conflict, whether it persists or escalates further, while several mechanisms could push aluminium prices higher, including:\n\nLogistical disruptions restricting alumina shipments to Middle Eastern smelters\nExport constraints limiting global availability of primary aluminium\nOperational risks including power disruptions or direct military damage to smelting facilities, and\nSpeculative risk premiums entering the market due to geopolitical uncertainty.\n\nMarket volatility doesn’t have to disrupt your supply chain. Learn how our metals price forecasts and analysis for the global base metals industry can support your procurement strategy. Get a sample of our base metals price forecast today.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}