Global Aluminum Industry "Earthquake"! World's Largest Single Aluminum Smelter Cuts Production

Bahrain Aluminum, which operates the world’s largest single-site aluminum smelter, announced over the weekend that it has begun phased production cuts. The company stated that, as maritime transportation through the Strait of Hormuz is affected, the shutdown will allow it to preserve raw material inventories and maintain operations in other parts of the plant.

It is reported that Bahrain Aluminum has already initiated the shutdown of three production lines—these lines account for 19% of its annual capacity (1.6 million tons), roughly 2.2% of global aluminum production.

Bahrain Aluminum’s cutback is the latest event amid global turmoil in the aluminum industry. Currently, manufacturers worldwide are facing soaring aluminum prices, and traders anticipate broader supply disruptions. The London aluminum price has recently surged to its highest level since 2022.

Due to shipping disruptions in the Strait of Hormuz, Bahrain Aluminum, a state-owned enterprise, along with other Middle Eastern aluminum smelters, has been facing interruptions in metal export transportation and alumina raw material imports.

Earlier this month, Bahrain Aluminum announced a suspension of sales to customers, and Qatar has recently been forced to halt some aluminum production due to natural gas shortages.

The well-known financial blog ZeroHedge pointed out that, according to the International Aluminum Association, by 2025, Gulf Cooperation Council countries will produce about 6.16 million tons of aluminum, accounting for approximately 8.35% of global supply. Bahrain Aluminum’s production cut, combined with potential broader chaos in the Gulf aluminum market, could further push up aluminum prices in the London market.

Indian Aluminum Giant Declares Force Majeure

In addition to the direct impact of conflict on Middle Eastern aluminum companies, aluminum plants in other regions worldwide are also currently facing operational challenges due to rising energy costs.

Sources say that, due to natural gas supply disruptions in the Middle East leading to shortages, Hindalco Industries in India has halted production of high-value-added aluminum products—extruded aluminum.

The announcement states that this metal producer under the Aditya Birla Group informed all its extruded aluminum customers of force majeure on March 11.

However, Hindalco Industries denied in a statement that its extruded aluminum business had ceased production. The company also noted that after some natural gas suppliers declared force majeure, it issued a notice to extruded aluminum customers, describing it as a “routine commercial notice regarding potential supply disruptions in the extrusion sector.”

The company added that extruded aluminum accounts for only a small part of its capacity, and the potential impact currently affects less than 0.1% of its overall operations. “Supported by self-supplied power and alternative energy arrangements, all other downstream and upstream businesses, including electrolytic aluminum, continue to operate normally,” it stated.

Extruded aluminum is widely used in construction, electric vehicles, electronics, and solar panels.

Currently, due to the war between the US, Israel, and Iran, India is embroiled in its most severe natural gas crisis in decades, with the government cutting industrial supplies to protect households from cooking gas shortages. Hindalco stated in its announcement, “The company has taken and will continue to take all reasonable measures to mitigate the impact of force majeure events.”

Aluminum, the second most widely used industrial metal after steel, has historically been affected by cyclical supply shocks.

This situation undoubtedly exposes the fragility of the complex aluminum supply network, composed of bauxite mines, alumina refineries, and smelters, which often operate in highly specialized forms that are difficult to replace easily.

Source: Sci-Tech Board Daily

Editor: Ma Wanhua

First Review: Xi Xiaoqian

Final Review: Zhang Lihua