Home - News - Qatar's production halt has exacerbated supply concerns, while the US and Israel's attack on Iran has dealt a blow to the global aluminum market.
Qatar's production halt has exacerbated supply concerns, while the US and Israel's attack on Iran has dealt a blow to the global aluminum market.
March 4, 2026
The military actions by the US and Israel against Iran have continued to escalate, spreading the impact from the oil and gas sector to the metal market. The Qatar Energy Company announced that after suspending liquefied natural gas (LNG) production due to a drone attack, it has now further halted the manufacturing of some downstream products, including aluminum. This decision has significantly intensified market concerns about the security of aluminum supply in the Middle East. Qatar Energy holds a 51% stake in the Qatar Aluminum Manufacturing Company, which, together with Norsk Hydro, operates the Qatalum aluminum smelting plant with an annual capacity of 648,000 tons. Although Hydro stated that Qatar Energy supplies natural gas to Qatalum, the specific impact of the current gas suspension on aluminum production is still unclear.
After the announcement, the price of LME three-month aluminum rose by 3.8% at one point, reaching a one-month high of $3,315 per ton. It then fell back to around $3,250. The European spot aluminum premium also rose rapidly, with the premiums for March and April reaching $378 per ton and $428 per ton respectively, hitting a three-and-a-half-year high. Although Qatar's share in EU primary aluminum imports is less than 1%, traders pointed out that the signal of production suspension might trigger a chain reaction. If more Gulf countries' smelters are hindered due to energy or shipping issues, the global supply pattern will significantly tighten.
The Gulf Cooperation Council (GCC) countries contributed approximately 8% of the global aluminum output last year and are significant sources of maritime exports. They are also highly dependent on imported alumina and bauxite to maintain their smelting operations. Analytical institutions have pointed out that the region imports approximately 680,000 tons of alumina per month. Currently, the cargo in the Gulf waters is only about 61,000 tons, and some in-transit goods may be delayed due to the closure of the Hormuz Strait. At the same time, nearly 10% of the inventory in the LME warehouse system has been cancelled for delivery, indicating that traders are locking in physical goods in advance to cope with potential shortages. Overall, the combination of energy disruptions and shipping bottlenecks has rapidly increased the supply risks in the aluminum market, and price fluctuations may continue to intensify.
