Disruptions to maritime traffic in the Middle East and Gulf region will mean smelters in the region will not only be unable to export aluminum, but will also be unable to receive the raw materials needed to continue producing the metal, analysts say.
Gulf Cooperation Council countries produce about 8% of the world’s aluminum, and their smelters rely on alumina imports via the Strait of Hormuz to produce the primary metal. That supply line is currently frozen as ships avoid the strait following attacks on Iran by the United States and Israel.
Ben Eyre, chief metals analyst at shipping data provider Kpler, said there was 407,000 tonnes of alumina at sea on its way to smelters in the region. Of this, only 61,000 tonnes have already reached the Middle East Gulf, Eyre said, adding that much of it came from Australia.
He said destinations include Emirates Global Aluminum’s Duval smelter in the United Arab Emirates, Aluminum Bahrain and Qatarum, a joint venture between Qatar Aluminum Manufacturing Company and Norsk Hydro.
Paul Adkins, managing director of aluminum consultancy AZ Global, estimates smelter alumina stocks that “most plants will run for four to eight weeks on high-security stocks.”
A Hydro spokesperson said the company was evaluating measures to ensure continuity of feedstock supply to its Qatari smelter.
“There is no immediate impact as Catalum stores supplies on site,” a spokesperson said, adding that the smelter continues to operate with reduced staffing.
Meanwhile, Kpler’s Ayre estimated that 545,000 tonnes of bauxite – the ore refined to make alumina – was in waters bound for EGA’s Al Taweelah alumina refinery, the region’s only bauxite importer.
Just under half of that, 263,000 tonnes, has already passed through the Strait of Hormuz and entered the Middle East Gulf, he added.
One ship, believed to be carrying al-Taweera’s first bauxite cargo from Sierra Leone, was en route to the UAE on Saturday morning when the attack began, but has since been anchored off the coast of the Gulf of Oman, Eyre said.
EGA did not respond to requests for comment. (Reporting by Tom Daly and Dylan Duan; Additional reporting by Polina Devitt; Editing by Jan Harvey)
