Aluminum caught fire due to war in West Asia, prices jumped 6%; Everything from car to airplane will be expensive!:

After the deepening war in the Middle East, its impact is now visible on the global metal market as well. On Monday, March 30, a strong jump of 6% was recorded in the prices of aluminum in the international market. After Iran targeted two major production sites in West Asia, there is a fear of complete collapse of the supply chain. This rise in the prices of this metal, which is considered very important for the automobile, aviation and solar sectors, can become a new headache for the global economy.

Prices broke records on London Metal Exchange

Following the Iran attacks, aluminum prices on the London Metal Exchange (LME) rose by 6% to $3,492 per tonne in early trading. This tension in West Asia has not only affected the prices of the metal, but has also given a huge rise in the shares of aluminum companies in big economies like Australia. Market experts believe that if the supply disruption prolongs, prices may even touch the $4,000 level.

Major production plants suffered ‘huge losses’

Emirates Global Aluminum (EGA), West Asia’s largest metal producer, has confirmed that its plant in Abu Dhabi has suffered “significant damage” in the attacks. At the same time, Bahrain’s government company ALBA is also assessing the damage caused to its facility. Although these companies have not yet clarified whether production has been completely halted or not, the news of reduction in supply has created panic among manufacturers around the world.

9% of the world’s supply stuck in the Strait of Hormuz

About 9% of the total supply of aluminum worldwide comes from West Asia alone. As the war enters its fifth week, a large part of these supplies is stuck in the ‘Strait of Hormuz’. This situation is no less than a major setback for companies making cars, planes and solar panels. Experts say that even if the Strait of Hormuz is reopened, there may be a huge shortage of metal in the market due to the damage caused to the plant.

What will be the impact on India and global market?

Stoppage of supply from a big smelter like EGA will have a direct impact on consumer goods across the world including India. Due to aluminum becoming expensive, the prices of smartphones, laptops, vehicles and construction materials may increase. Meanwhile, due to the tariff rules of US President Donald Trump, recycling plants are benefiting, but overall the burden on the pockets of the general public is certain to increase.