Due to the conflict in the Middle East causing the closure of the Strait of Hormuz, Emirates Global Aluminium (EGA) will be transporting its aluminium exports and raw materials through the Sohar Port in Oman in the coming days. Three informed sources disclosed that the war between the United States and Israel against Iran has now entered its third week. Regional enterprises, including aluminium producers, are seeking alternative export routes. Since the outbreak of the conflict, due to concerns about a larger-scale shortage in the global market, the price of aluminium reached a four-year high of $3,546.50 per ton last week, rising by 12%.
The enterprises are diverting the imported goods originally destined for the Gulf countries to ports outside the Strait of Hormuz, such as Shohar and Fujairah in the United Arab Emirates, and then transporting the containers by truck to their destinations. In terms of exports, in addition to crude oil, oil products and liquefied natural gas, the Gulf region also has approximately 7 million tons of aluminum production capacity, accounting for about 9% of the global supply. Nearly 80% of it is exported, mainly to the United States and Europe, for use in the automotive, construction and packaging industries. A source said that EGA will import alumina raw materials through Shohar and then transport them by truck to the smelting plants in Dubai or Abu Dhabi. The company also plans to start transporting the produced aluminum by truck from Shohar for export this week, but the specific quantity is unknown.
When asked about the plans disclosed by the sources to Reuters, Simon Beek, the senior vice president of corporate affairs at EGA, said that the company would not provide continuous comments on how to deal with the current situation, but pointed out that the information given contained some inaccuracies and refused to elaborate further. EGA produces approximately 2.7 million tons of primary aluminum annually in the United Arab Emirates.
The Alba aluminium company, with an annual production capacity of 1.6 million tons, may also follow suit. Two informed sources said that the aluminium company intends to use the Suhaar Port and is exploring the possibility of using the Jeddah Port on the Red Sea coast of Saudi Arabia. The aluminium company did not respond to Reuters' request for comment. The Suhaar Aluminium plant of the Oman Smelter has facilities in Suhaar for importing raw materials and exporting aluminium products. The two sources said that the port has no direct attack record since its development over 20 years ago, and the drone that crashed in Suhaar Province last week did not damage the port.
This dynamic indicates that in the face of the severe challenge of the closure of the Strait of Hormuz, the aluminum producers in the Gulf region are rapidly adjusting their logistics strategies. The strategic value of Surah Port as an alternative export point has become prominent, while truck transportation, although more costly, has become a necessary means for maintaining the supply chain during wartime. As the conflict continues, more Gulf enterprises may follow this model, promoting the reconfiguration of regional trade flows.
