Iranian drone and missile attacks on two major Gulf aluminium producers over the weekend have sent shockwaves through global metals markets, propelling prices to peaks not seen since 2022 and heightening fears of a crippling supply crunch.
Futures on the London Metal Exchange surged 5.5% on Monday morning, touching $3,492 per tonne—a level last hit in April 2022 amid the fallout from Russia’s Ukraine invasion—before easing to close 3.5% higher at $3,381 per tonne. The metal has now climbed about 10% since late February hostilities erupted, shrugging off last week’s dip triggered by global recession anxieties.
Emirates Global Aluminium (EGA) and Aluminium Bahrain, heavyweights accounting for a slice of the Gulf’s 9% global aluminium output, bore the brunt of Saturday’s strikes. EGA revealed significant damage to its Al Taweelah smelter in the UAE, which produced 1.6 million tonnes in 2025, along with injuries to workers.
“The safety and security of our people is our top priority at all times,” said CEO Abdulnasser Bin Kalban. “We are deeply saddened and are assessing the damage to our facilities.”
With Iran blocking the Strait of Hormuz, regional exports have plummeted 70% since March, per Reuters shipping data, compounding a month of turmoil reminiscent of 2022’s energy shocks. Analysts warn Gulf cuts could wipe out 800,000–900,000 tonnes next year, tipping markets into deficit.
“The attacks have sent shockwaves through the global aluminum market, raising the risk of a supply crisis that could reshape the industry,” April Kaye Soriano of S&P Global Energy told CNBC. Joyce Li at Macquarie flagged a pre-attack 20% capacity loss as enough for a full-year shortfall, though the situation remains fluid.
China, curbing output at 45.5 million tonnes to fight emissions, could counter idle smelters. “If the Chinese government decides that the prices are too high, they can restart a number of idle smelters in the country and the world will be full of aluminum,” said ACG Metals CEO Artem Volynets on CNBC.
Yet Soriano cautioned, “While there is some capacity to increase output, the global market remains exposed to further shocks, especially if the conflict spreads to other metal supply chains.”
LME stocks are down 15%, with premiums jumping 20% in Asia.