Will Iran’s strikes on Gulf smelters strengthen China’s aluminium trade?

Iranian attacks damaged major aluminium smelters in the United Arab Emirates and Bahrain over the weekend, potentially disrupting global aluminium supply. Emirates Global Aluminium (EGA) reported significant damage, while Aluminium Bahrain assessed damages and employee injuries. The attacks, claimed by Iran's IRGC as retaliation for attacks on Iranian steel plants, targeted facilities representing nearly 4% of global aluminium production capacity. Analysts at China International Capital Corporation (CICC) suggest the disruption could shift more aluminium production to China, both in the short term and potentially for years, due to the time required to repair the damaged facilities. The attacks also raise safety concerns, potentially leading to further output reductions in the Middle East.

Iranian strikes targeted Aluminium Bahrain (Alba) and Emirates Global Aluminium (EGA) facilities on Saturday, injuring two Alba employees and causing significant damage to EGA's site. The attacks are part of a broader Iranian assault on Gulf economic infrastructure, including oil refineries, ports, and shipping lanes. The Islamic Revolutionary Guards Corps claimed responsibility, citing retaliation for attacks on Iranian steel plants with ties to US military and aeronautics firms. The Strait of Hormuz closure, due to the US-Israeli war on Iran, has already disrupted shipments from Gulf aluminium producers, who account for approximately 9% of global supply. Alba operates the world's largest single-site smelter, while EGA is the Middle East's largest aluminium producer.

Iran's IRGC claimed responsibility for missile and drone attacks on aluminum facilities in Bahrain and the UAE on Saturday. The IRGC stated the attacks targeted sites linked to the US military in retaliation for US-Israeli attacks on Iranian industrial infrastructure. Aluminium Bahrain reported two employees injured, while Emirates Global Aluminium cited significant damage and six injuries at its Abu Dhabi site. A worker in Oman was also injured in a drone attack at Salalah port, leading Maersk to temporarily halt operations there. Oman condemned the attacks on its territory, though no group has claimed responsibility for the Omani attack. The Bahrain and UAE attacks could threaten global aluminum supply, as the region accounts for a significant portion of it.