Bahrain starts output cuts at world’s top aluminum smelter
Aluminium Bahrain BSC started a phased production shutdown at the world’s largest single-site smelter of the metal, deepening the disruptions that have rocked the industry and sent prices soaring amid the war in the Middle East.
The company, known as Alba, said it has initiated a shutdown of three production lines, which together represent 19% of its total output capacity of 1.6 million tons a year. The suspension will allow it to preserve its inventory of raw materials and keep other parts of the plant operating as maritime transit through the Strait of Hormuz is affected, it said.
Alba’s cutback is the latest event in the turmoil that has hit the global aluminum industry, with manufacturers facing a spike in prices and traders expecting widespread supply blockages. Prices on the London Metal Exchange have jumped to the highest level since 2022.
Along with other aluminum smelters in the Middle East, state-owned Alba has been facing disruptions to outbound shipments of metal and incoming supplies of alumina feedstock due to shipping standstill at Hormuz. Alba suspended sales to customers earlier this month, while Qatar was forced to halt some aluminum production due to a shortage of natural gas.
Bloomberg reported on Friday that India’s Hindalco Industries Ltd. had notified customers it was suspending sales of extruded aluminum products because of disruptions to gas supplies. Hindalco said on Sunday its extrusion operations were still continuing but that force majeure declarations by some of its gas suppliers could have an impact on sales from that part of the business.
Aluminum is the most ubiquitous industrial metal after steel, but in recent years the market has been periodically rocked by supply shocks. It’s exposed fragilities in the complex network of bauxite mines, alumina refineries and aluminum smelters that supply to manufacturers around the world — often in highly specialized forms that can’t readily be replaced.
This story was originally featured on Fortune.com