🚙🥫 The global aluminium market is experiencing on of its largest supply SHOCKS in the modern era:

London Metal Exchange aluminium prices rose to a 4-year high of $3,672 per ton on April 16, while US physical premiums surged to a record $2,521.50 per ton.

European physical premiums jumped +90% in the 6 weeks since the start of the Iran War.

Physical premiums are the extra cost buyers pay on top of the exchange price to secure immediate delivery of real aluminium, and when they surge it signals acute physical scarcity.

The Middle East makes up ~9% of global aluminium production capacity, or ~7 million metric tons annually, with Gulf Cooperation Council countries alone making up more than 6 million tons.

Qatar's Qatalum has already cut production by -40%, while Aluminium Bahrain shut down ~20% of its capacity, and a major UAE smelter was forced to halt operations entirely after drone strikes, with a restart potentially taking up to a year.

The market may face a deficit of at least 2 million tons by year-end, against total global visible inventories of just 1.5 million tons, according to Mercuria.

JPMorgan warns this will be the largest aluminium supply deficit in more than 25 years, with the US and Europe most exposed given low domestic stockpiles and heavy reliance on Middle Eastern imports.

Aluminium is in everything from cars to cans, and its price shock is about to hit every industry.

🔗 Global Markets Investor