Mike Watman

The aluminum shock nobody was ready for Mercuria analyst Nick Snowdon stood at the FT Commodities Summit this week and delivered a verdict that should have landed harder than it did. This is, he said, “probably the biggest single supply shock” in base metals this century. He’s not wrong. And it’s going to get worse before it gets better. Iranian strikes on EGA’s Al Taweelah smelter in Abu Dhabi and Alba’s facility in Bahrain in late March didn’t just knock out production lines. At Al Taweelah, the strikes cut power to the facility entirely, forcing the potlines into an uncontrolled shutdown. Metal solidified inside the smelting circuits. That’s months of structural damage. The two plants together produced around 3.2 million tonnes of cast metal in 2025. The disruption has now cascaded beyond aluminum: Bahrain’s Foulath Holding, parent of Bahrain Steel, declared force majeure the same day.  Together with curtailments at Qatar’s Qatalum, the combined production loss could reach around 3 million tonnes  by the time the dust settles. Mercuria puts the global deficit at 2 million metric tons by year-end. Others think that’s optimistic. LME aluminum hit a four-year high on April 16. Traders warn prices could push past the 2022 record of $4,073 per tonne if shipping through the Strait of Hormuz doesn’t resume soon.  Who actually gets hurt? The US takes the most direct hit. America has a 60% net reliance on aluminum imports and produced just 660,000 tonnes domestically in 2025 – less than half of Alba’s output alone. Middle Eastern suppliers accounted for nearly 22% of total US aluminum imports last year, with the UAE and Bahrain ranking as the second and fourth largest suppliers respectively.  After the US and UK banned Russian aluminum from major exchanges in April 2024, Gulf exports to Western markets surged to fill the gap. Now that gap has a gap.  Europe isn’t insulated either. One industry executive described the prospect of cascading Gulf smelter closures as “an unbelievable threat” for European manufacturers  – and that was before the strikes happened. The smelters represent nearly 4% of global aluminum production capacity combined. That’s beer cans, car bodies, aircraft fuselages, food packaging, solar panels. The metal is everywhere. And recovery, even under the best conditions, is expected to take up to a year. The China question. Analysts say the disruption is likely to push more production toward China, which already controls more than half of global supply. Whether Beijing chooses to fill the void or hold back and watch prices rise is a decision with significant geopolitical weight. S&P Global’s aluminum analyst believes China’s ability to ramp up is limited.  Others are less sure. Either way, the West just handed China a structural opening in a critical industrial metal. That’s the part the Mercuria headline doesn’t quite capture.

Still showing up, still smiling, still advocating for Ukraine. Fucking legend!

Near Kharkiv this morning, a russian drone struck a civilian car. The vehicle was traveling between villages when it was hit. One man was killed, another was injured. A bloody “human safari” the world continues to look away from.