Iran blows hole in US aluminium supply chain with smelter strikes

With attacks on the two biggest aluminium smelters in the Middle East over the weekend, Iran struck at major suppliers to the United States of a strategic metal the world's biggest economy does not produce nearly enough of domestically, analysts said.

Before the weekend, disruption from the Iran war centred around the difficulty of shipping aluminium and raw materials through the Strait of Hormuz, which has been effectively closed by Tehran.

But on Saturday, Emirates Global Aluminium said its roughly 1.5 million metric ton per year Al Taweelah site in Abu Dhabi, in the United Arab Emirates, had sustained significant damage from Iranian attacks. Aluminium Bahrain ALBH.BH said its 1.6 million ton per year plant was targeted on the same day.

Neither company has since provided an update on operations. But the attacks have abruptly shifted concerns from temporary shipping snarls to a potentially more serious threat to production in the region.

"That changes the nature of the risk," Paul Adkins, head of aluminium consultancy AZ Global, wrote on LinkedIn.

London Metal Exchange aluminium prices CMAL3 reacted on Monday leaping 6% to $3,492 a ton, close to a four-year high.

"In this sort of market, when you suddenly take out 3 million tons of capacity, it cannot be replaced," said Panmure Liberum analyst Tom Price.

US DOMESTIC PRODUCTION DWARFED BY MIDDLE EAST

Aluminium - widely used in cars and packaging and named on the list of 60 minerals the U.S. government deems critical - is now seeing supply‑chain risks turn into reality.

The U.S. has a 60% net reliance on aluminium imports, according to the U.S. Geological Survey. It produced just 660,000 tons of primary aluminium itself in 2025, or less than half the output of Alba alone.

Of the 3.4 million tons of total U.S. imports of primary and alloyed aluminium last year, supplies from the Middle East accounted for nearly 22%, according to information provider Trade Data Monitor.

The UAE and Bahrain, which through EGA and Alba make up more than two-thirds of the Gulf region's aluminium production, were the United States' second- and fourth-biggest suppliers, respectively.

Iran said both EGA and Alba were linked to U.S. military industries, and the attacks followed Israeli strikes on two Iranian steel operations.

Analysts, however, are sceptical.

"There's no direct link to the U.S. military other than that some of their metal might eventually go into military application through a long chain of changing hands and processing," said Wood Mackenzie senior research manager Uday Patel.

Wood Mackenzie estimates U.S. military and defence industries consume 450,000 tons of aluminium annually.

Price said he believed the U.S. military sources most of its aluminium from Canada.

But while the U.S. military may not be directly impacted, that does not mean Iran's targeting of Gulf output and a potential deepening of the conflict are not inflicting damage on the U.S. and other major economies.

"The stresses are already starting to show in terms of industrial activity and further hampering planning, which was already struggling on high levels of uncertainty," StoneX analyst Natalie Scott-Gray wrote in a note.

-Tom Daly and Pratima Desai/Reuters