The global aluminum market is currently experiencing a significant “black swan” event due to disruptions caused by the ongoing conflict in the Middle East, said a top metal analyst.
“The scale of the supply shock we’re seeing in the aluminum market is probably the largest single supply shock a base metals market has suffered in the post-2000 era,” Nick Snowdon, Mercuria’s head of metals and mining research, told Reuters at the sidelines of the FT Commodities Global Summit in Lausanne on Tuesday.
The Middle East region contributes around 7 million metric tons of annual aluminum smelting capacity, which is nearly 9% of the estimated global supply for this year, according to Mercuria.
Mercuria told the publication that Middle East aluminum is hard to replace, with China capped on output and limited spare capacity in the U.S. and Europe, leaving them vulnerable to supply shocks.
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