The World Aluminium Summit, hosted by CRU, outlined how supply disruptions in the Gulf and low stock levels are set to push aluminium prices above $4,000.
The ongoing conference, hosted at Savoy Place in London, has brought together over 360 delegates to examine the current situation in the Middle East alongside a new wave of upcoming investments.
Paul Williams, Head of the Aluminium Value Chain at CRU, opened the event with a keynote titled “Short-term crisis but longer-term opportunities”.
He said the crisis was caused by disruption to GCC supply, with production in the member states predicted to fall 28% year-on-year.
Smelters have been directly impacted in terms of production, as well as the ability to import raw materials and export products due to the blockade of the Strait of Hormuz.
This included Emirates Global Aluminium (EGA)’s Al Taweelah smelter in Abu Dhabi, where emergency procedures to close the smelter power plant, recycling plant, and refinery were enacted.
Aluminium Bahrain (Alba) also initiated a shutdown of three smelting lines, which accounted for 19% of its capacity.
Overall, CRU estimates a total of 3.4 million tonnes of annual capacity will be closed due to the crisis at this time.
It also forecast a deficit of over 1.4 million tonnes, as it did not think global prime demand (excluding China) would rise this year.
Paul Williams, Head of the Aluminium Value Chain at CRU.
Mr Williams said: “We have seen deficits like this in the market before, but in previous times stock levels were historically high.
“This time it is going to be far more difficult. We are coming off a period where stocks have been coming off for a number of years and are critically low. It is a huge impact on the global market.”
Therefore, CRU predicts aluminium prices of above $4,000 per tonne over the next 12 to 18 months.
However, Mr Williams highlighted a wave of upcoming projects, mostly funded by Chinese investment in countries such as Indonesia, Angola, Vietnam, and Saudi Arabia.
Meanwhile, in the US, EGA plans to build the country’s first primary aluminium smelter in almost 50 years alongside Century Aluminum.
Adel Abubakar, Chief Marketing Officer at EGA, said during a panel discussion at the conference that the investment would not be affected by the current situation.
Furthermore, Arctial plans to build a smelter alongside Rio Tinto in Finland.
Maxime Vandersmissen, Chief Commercial Officer at Arctial, said it would be the first aluminium smelter in Europe in three decades.
It aims to produce 610,000 tons per year, which would increase Europe’s capacity by 20%, with first hot metal production targeted for the second half of 2029.
The conference continues today for its final day, focusing on how the Middle East conflict is disrupting supply chains, including the impact on commodity markets.
