Major global automakers are rushing to secure aluminum supplies as the ongoing Gulf conflict threatens production and shipping routes. The shortage has prompted concerns that supplies could run out within months if tensions persist.
Producers in the Gulf, including Aluminium Bahrain and Qatalum, have scaled back production due to energy interruptions and shipping bottlenecks, affecting exports and imports of raw materials. Aluminum is a key component in industries ranging from automotive to aerospace and construction.
Executives from automakers and auto parts suppliers have told the Financial Times that companies are building emergency reserves as the conflict enters its fourth week.
“If the situation continues, there will be more panic buying,” said an aluminum industry executive. “This crisis is very different from previous ones.”
Automakers seek alternative sources
Several Western carmakers report difficulty securing new aluminum supplies, relying on existing inventories expected to last only a few months. One company noted that a major shipment left the Gulf just before the conflict began, while others are maximizing use of recycled scrap metal to offset shortages.
In Japan, companies are considering sourcing aluminum from Russia despite ongoing boycotts following Moscow’s 2022 invasion of Ukraine. Koji Sato, CEO of Toyota, acknowledged that Japanese automakers are exploring alternative suppliers due to their reliance on Gulf imports.
Regional impact and shipping risks
Europe, the US, and Japan import significant quantities of Gulf aluminum, which accounts for roughly 10% of global refined metal production. European imports from the Gulf make up 14% of demand, while Japan relies on 25%. The region’s supplies are vulnerable to shipping delays through the Strait of Hormuz, and rising natural gas prices have further reduced output.
Automotive executives warn that production may need to slow by mid-year unless Gulf shipments resume. One Japanese carmaker described the market as “extremely turbulent,” predicting potential production cuts within four months if supplies remain constrained.
Price surges and supply chain stress
Aluminum prices on the London Metal Exchange spiked up to 12% after the conflict began, with premiums in the US, Europe, and Japan rising even higher. Certain specialized products, such as alloys for car wheels and engine blocks, are in acute shortage.
Industry experts caution that automakers could take up to 18 months to secure alternative suppliers that meet their strict specifications. Recent events, including a fire at a New York aluminum plant, have already disrupted production of popular vehicles like the Ford F-150.
Dan Hers, a supply chain specialist at AlixPartners, told the Financial Times that companies cannot afford further disruption or unexpected price hikes, especially amid tariffs and other supply chain challenges from the past year.
