Aluminum prices soar to a new high in nearly 4 years, supply chain crisis strikes?

According to the latest news app report,Bahrain Aluminum Industry(Alba) officially announced on March 4th that it will invoke the terms of the supply contract for some international customersForce Majeure ClauseSuspend the delivery of aluminum ingots and related products.

This sudden measure originated directly fromstrait of hormuzShipping has been severely disrupted, not due to operational failures at its local smelter in Bahrain. The escalation of tensions in the Middle East has led to the near paralysis of the world's busiest energy and commodity channel logistics, and the global aluminum supply chain crisis is rapidly escalating.

Stimulated by the news,aluminum priceOn the day of the surge, LME March aluminum futures reached a high of $3418 per ton, setting a new four-year high since 2022; The main contract of Shanghai Aluminum has surged to a maximum of 25520 yuan/ton, with the latest real-time quotation ranging from 25150-25160 yuan/ton, a cumulative increase of more than 5% compared to before the event.

As one of the world's largest aluminum producers,Bahrain Aluminum IndustryThe annual production capacity exceeds 1 million tons, and its suspension of delivery will directly affect downstream industries such as automobiles, aviation, construction, and packaging. Insiders have revealed that manufacturers in Europe, Asia, and the United States are facing the risk of raw material shortages, and multiple factories are urgently evaluating production cuts or seeking alternative sources of goods.

At present, global aluminum inventories are at historically low levels, coupled with fluctuations in energy prices, any supply disruptions are rapidly amplified by the market. Goldman Sachs Metal Team's latest review states:“strait of hormuzThe logistics bottleneck is expected to continue for several weeks, and the tight supply of aluminum will continue to support price increases

AlthoughBahrain Aluminum IndustryEmphasizing that factory production is completely normal, but the resumption of cross-strait navigation still depends on the progress of easing the situation in the Middle East. Morgan Stanley reminds, short-termaluminum priceIt will continue to fluctuate at a high level, and if alternative routes are quickly opened, prices may experience profit taking.

At present, LME aluminum inventory has dropped to a recent low, and the Asian spot premium continues to expand, further confirming the market's supply anxiety.

To clearly compare the price performance before and after the event, the following table summarizes the latest real-time data:

From a deeper perspective, this crisis highlights the fragility of the global commodity supply chain. European car manufacturers have issued warnings that Asian electronics and packaging companies may shift towards inventory consumption, and the US construction industry is facing significant cost pressures. ifstrait of hormuzLong term obstruction,aluminum priceExpected to test the $3500/ton threshold;

On the contrary, once shipping resumes,AohuiThe price may quickly fall back to around $3100. Investors need to focus on tracking subsequent data on cross-strait passage and changes in inventory in major aluminum producing countries.

edit summary

Bahrain Aluminum IndustryThe statement of force majeure combined with geopolitical logistics bottlenecks has been resolvedaluminum pricePushing to a nearly four-year high, the crisis rapidly spread from the energy sector to non-ferrous metals. Short term high volatility will become the main theme, and the medium to long term trend still depends on the easing of the situation in the Middle East and the global alternative supply capacity.

[Frequently Asked Questions]

Question 1:Bahrain Aluminum IndustryWhy was the delivery suddenly suspended?

Bahrain Aluminum IndustryOn March 4th, Alba cited the contractForce Majeure ClauseSuspend aluminum delivery to some customers mainly due tostrait of hormuzShipping is severely hindered, rather than the factory itself shutting down. The strait is a critical passage for global oil and commodities, and the Middle East conflict has caused disruptions in transit logistics, directly affecting its export fulfillment capabilities.

Question 2:aluminum priceWhy has it reached a new high in the past four years?

to receiveBahrain Aluminum IndustryStimulated by the news of force majeure, LME aluminum reached a high of 3418 US dollars/ton (a new high in nearly 4 years), while Shanghai aluminum's main force reached a high of 25520 yuan/ton. The global aluminum inventory is low, coupled with the expectation of supply chain crisis, speculative funds are rapidly pouring in, and the short-term supply-demand imbalance is amplified by the market.

Question 3: How will this incident affect the global manufacturing industry?

Manufacturers in Europe, Asia, and the United States may face raw material shortages, with the automotive, aviation, construction, and packaging industries bearing the brunt. Logistics bottlenecks may lead to factory production cuts or cost increases, and in the short term, companies need to turn to inventory consumption or seek alternative suppliers.

Question 4: Institutions' expectations for the future marketaluminum priceWhat is your opinion?

Goldman Sachs believes that tight logistics will support price increases, while Morgan Stanley reminds attention to the risk of a pullback after shipping resumes. Overall, maintaining a high volatility in the short term depends on the easing of conflicts and the speed of inventory replenishment in the medium to long term.

Question 5: How should investors currently operate aluminum related products?

Short term attention can be paid to LME's $3200-3500 range with high selling and low buying, but strict control of positions is required. Long term optimistic about the logic of tight supply, but it is recommended to prioritize risk management in combination with crude oil and geopolitical news to avoid chasing high prices.