Al price forecasts hit $4,000/t on Middle East conflict

: Metals
26/03/05

Aluminium price forecasts are surging higher because of the disruption to deliveries from producers in the Middle East as a result of the US-Israel and Iran war, and some analysts are now suggesting that London Metal Exchange (LME) aluminium prices could reach all-time highs above $4,000/t. Regional premiums are also set for substantial increases against an unprecedentedly tight supply outlook.

Official LME three-month aluminium prices reached $3,372/t in Wednesday's trading, topping the earlier 2026 peak from late January and setting a new four-year high after supply from producers in the Middle East was cut off from global consumers because of shipping disruption through the strait of Hormuz. More than 5mn t of aluminium was shipped through the strait last year, bound for around 70 countries across Asia, Europe and North America, with vast quantities of bauxite and alumina passing through in the opposite direction.

Regional aluminium producers Qatalum and Alba have already announced production and delivery stoppages. Saudi Arabia's Maaden and the UAE's Emirates Global Aluminium (EGA) have options to move material by truck to other ports and avoid the affected waterway, but this will entail significant time and expense, and does not solve the issue of ensuring raw material deliveries vital to continuing operations in the longer term. EGA informed customers earlier this week that it could also leverage stocks held outside the UAE to ensure near-term deliveries.

US investment bank Goldman Sachs said earlier this week that just one month of full production loss from the Middle East would temporarily justify a price of $3,600/t, but forecasts have since increased as the market considers a longer-term disruption to supplies from the region. Fellow US bank Citi on Wednesday raised its price forecast for the next three months to $3,600/t, but said prices could climb to $4,000/t "in a bull-case scenario".

"Force majeure has now materialised at two Gulf producers, marking a clear shift from risk to realised disruption," Citi said.

Analysts also see significant upside to regional delivery premiums as the Middle East disruption adds to an already tight supply outlook, especially in Europe, which in recent years has seen Russian supplies cut off because of the conflict in Ukraine, swathes of domestic capacity closed because of high energy prices, and dwindling supply of aluminium scrap because of leakage to export markets that can offer higher prices. More recently, Europe faces the imminent loss of supply from the Mozal smelter in Mozambique because of power problems and an ongoing production stoppage at Icelandic smelter Nordural. The US, meanwhile, is dealing with the impacts of President Donald Trump's trade tariffs.

Argus' assessment for the European P1020 duty-paid aluminium premium jumped to $410-440/t on Wednesday, from $340-370/t previously, while its assessment for the US Midwest premium set a new record high at $1.06-1.08/lb, up from $1.03-1.05/lb a week earlier. Premiums are likely to continue to rise for as long as output from the Middle East remains disrupted.

By Jethro Wookey

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26/03/05

Gulf shipping crisis disrupts India’s Mn alloy exports

Mumbai, 5 March (Argus) — The mounting war in the Middle East has disrupted trade flows for India's manganese alloy sector, creating one of the most challenging operating environments in recent years with shipping suspensions, rising freight and mounting cost pressures. India typically supplies 500,000-600,000t of manganese alloys annually to the UAE, Turkey, Egypt, Qatar, Oman, Bahrain and Saudi Arabia. Most carriers have halted services to Europe, north Africa and the Middle East because of security threats and soaring insurance premiums, stopping shipments from Indian exporters. Monthly flows of around 40,000–50,000t have now effectively stopped, and shipments have been completely stalled for nearly 15 days. Freight is the single largest disruption. The diversion of vessels around the Cape of Good Hope to avoid the Suez Canal for shipments to Europe has further strained logistics because of security and insurance complications. Ships that once completed two voyages in 60-70 days can now complete only one, tightening vessel availability and extending delivery timelines for bulk commodities. The strait of Hormuz, long considered more influential than many stock exchanges in shaping global commodity sentiment, is again acting as a major volatility trigger, lifting fuel-related and freight-linked costs, an exporter told Argus . Imported manganese ore costs are also rising, with freight from some origins climbing from $50-60 to $100-125 per container, while other routes are now near $1,000 per container. At the producer level, margin pressure is intensifying. Rising energy costs are eating into profitability while freight volatility directly undermines export competitiveness. The weakening rupee offers some relief to exporters through higher realisations, but the simultaneous rise in import costs for manganese ore and energy inputs offsets this benefit. The sudden freeze could leave excess material trapped in the domestic market, adding downward pressure on prices even as producers face cost inflation. Buyers are delaying contracts because of uncertainty about price direction amid the volatility, leaving much of the market in a wait-and-see mode. The sector faces a prolonged stretch of logistical strain, with exporters recalculating margins and delivery risks and carriers avoiding key shipping corridors. There are expectations that freight costs may rise further. Container rates that previously ranged $1,000-1,600 could rise as high as $4,000 a box if the conflict continues, some market participants said. Freight rates could rise by 30-50pc if the war continues, traders said. The loss of Middle Eastern demand and the likely buildup of domestic supply could exert downward pressure, making any immediate price increase in manganese alloys unlikely, traders said. The broader outlook remains fluid, with volatility set to persist, while efficiency, captive power and strategic risk management become more critical in the long term. By Deepika Singh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Asian scrap trading stalls on geopolitical uncertainty

26/03/05

Asian scrap trading stalls on geopolitical uncertainty

Shanghai, 5 March (Argus) — Activity on Asian ferrous scrap markets are expected to decline as a result of the escalating conflict between the US and Iran, causing growing concerns among steelmakers on finished steel sales. But some Japanese traders anticipate trade flows to increase within Asia. Spot trading activity was thin this week, because both buyers and sellers stepped back to assess the impact of the conflict in the Mideast Gulf on commodity markets. Asian ferrous markets are not directly exposed to potential logistics disruptions, but many scrap participants chose to stay on the sidelines given tighter vessel availability, rising freight costs, increasing production costs, volatile exchange rates and unclear direction in the steel market. Scrap sellers were cautious to update offers without first securing vessels. Freight rates received by a Japanese trader this week were only slightly higher by $3-4/t from last week because the routes are within Asia, the trader said. But offers are quite limited, and shipowners will raise rates further if fuel costs continue to climb, they added. In addition to higher freight rates, Japan's firm domestic market further challenged export negotiations. Tokyo Steel increased domestic collection prices by $12.70-15.80/t over 19 February-3 March in an effort to retain more scrap in the local market. Some Japanese traders expect demand from south Asian countries for Japanese scrap to increase if disruptions around the strait of Hormuz reduce supply flows from the Middle East. Pakistan imported 1.23mn t of scrap from the UAE in 2025, while India imported 510,000t from the UAE in the same year, according to Global Trade Tracker (GTT) data. South Asian buyers need to source alternative supply to meet their production demand, a Japanese trader said. Meanwhile prices in some Asian markets like Taiwan, where mills typically prefer to make weekly procurements, have started to rise this week. Offers for containerised HMS 1/2 80:20 have risen as high as $330/t this week, up by approximately $10/t from the last traded price in the week of 23-27 February. Argus assessed the HMS 1/2 80:20 containerised scrap price at $225/t on 4 March, marking a $5/t increase on the day. Weaker steel demand to pressure scrap Potential weakness in steel sales is also weighing on Asian steelmakers' scrap procurement. The Middle East was an important market for Chinese steel products in 2025. Higher freight rates will affect shipments of previous orders and new sales of finished and semi-finished steel products from Asia to the Middle East. Some producers may redirect supply to Asian markets, intensifying regional competition. Asian scrap buyers are also concerned that steel prices may not rise in line with raw material costs because elevated steel prices could dampen downstream demand. March-May is typically the peak construction season across many southeast Asian markets. If the US-Iran conflict persists longer than expected, higher crude oil prices could fuel inflation expectations and heighten growth risks in many economies, market sources said. Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US court orders refunds on Trump's IEEPA tariffs

26/03/04

US court orders refunds on Trump's IEEPA tariffs

Washington, 4 March (Argus) — A federal court has ordered President Donald Trump's administration to begin processing refunds on tens of billions of dollars in emergency tariffs the US Supreme Court said last month were unlawful. US Customs and Border Protection (CBP) must recalculate final duties owed on "any and all" imported goods without including the tariffs that Trump imposed under law called the International Emergency Economic Powers Act (IEEPA), Richard Eaton, a judge on the US Court of International Trade, wrote in a three-page decision on Wednesday. Eaton, who said he is the only judge on the court hearing IEEPA tariff refund cases, said the Supreme Court's decision that struck down Trump's emergency tariffs should provide across-the-board relief, even to those that had not filed lawsuits. Thousands of companies have already filed lawsuits seeking refunds of the IEEPA tariffs, which collected an estimated $175bn from importers during the nearly one-year period when Trump had them in effect. "All importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision," Eaton wrote, referencing the name of the Supreme Court's tariff ruling. The court's order does not explicitly lay out the refund process, but instead applies to customs entries that are "unliquidated" — those that are pending — and those that are liquidated but not yet final. The order, issued as part of a tariff refund lawsuit an air filtration product company filed less than a week ago, suggests that courts intend to move quickly on refunds after the Supreme Court's 6-3 ruling finding Trump had no authority to impose his emergency tariffs. Earlier this week, a federal appeals court denied a request by the Trump administration for a months-long delay in court proceedings over tariff refunds, allowing tariff lawsuits to resume in the Court of International Trade. Trump previously said the refund process might take "years" to resolve in court. The Trump administration told Eaton this week it was still considering "next steps" for the Supreme Court opinion, including the mechanics and "scope" of refunds. As of Wednesday, CBP said it had not paid refunds on any of the IEEPA tariffs. In a court filing earlier on Wednesday, the administration conceded that it would have to also pay interest on any tariff refunds it is required to make. The cumulative interest payments on the refunded tariffs could reach $700mn each month, according to calculations the think tank Cato Institute published this week. US senator Ed Markey (D-Massachusetts), in a letter on Wednesday to administration officials, said that the Trump administration's "dithering" on tariff refunds had created an opening for those on Wall Street to offer small companies with immediate cash needs "pennies on the dollars" to purchase their tariff refund rights. Further delaying tariff refunds would result in "more pain" for US companies and their customers, he wrote. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Brazil’s Jan PPI contracts on fuels, food

26/03/04

Brazil’s Jan PPI contracts on fuels, food

Sao Paulo, 4 March (Argus) — Prices paid to Brazilian producers fell by 4.33pc in January from a year earlier, mostly pushed down by the food sector and fuels, according to government statistics agency IBGE. The decline in the producer price index (PPI) slowed from a 4.51pc contraction in December but quickened from 3.36pc in November and smaller contractions the prior two months. The disinflation in PPI suggests that consumer price inflation, which accelerated to 4.44pc in January from 4.26pc in December, may soon be easing. The food sector, which accounted for more than half of the total PPI index result, fell by 9.84pc in January from a year earlier, after a 10.48pc annual loss in December, extending a negative streak begun in September, IBGE said. Sugar products and pork were among the main negative drivers, while falling sugar prices were mainly affected by a weakening dollar to the Brazilian real over the last year. IBGE's research manager Murilo Alvim said. As for crude and biofuels, producer prices for the sector fell by 7.64pc in the last 12-months, following a 5.64pc annual loss in December and marking an eight-month low, IBGE data show. Metallurgy producer prices fell by 4.91pc in January from a year earlier, following an 8.06pc annual loss in December. The index ticked up by 0.3pc from December. Brazil's PPI posted 10 consecutive monthly declines from February-November 2025, IBGE said. Copper and gold contributed the most to inflationary pressures within metallurgy in the monthly comparison, adding up to its 2.73pc. As for chemicals, sulfur-based fertilizers and other imported feedstocks raised producer prices to a 1.7pc gain from December, Alvim said. PPI measures average prices offered by suppliers to domestic producers of goods and services without considering taxes and freight costs. By João Curi Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Sulphur chokepoint threatens battery metals

26/03/04

Sulphur chokepoint threatens battery metals

London, 4 March (Argus) — The widening conflict in the Middle East threatens to squeeze the supply of sulphur through the strait of Hormuz, with potential long-lasting second-order effects on key battery metals production. The most immediate industrial vulnerability lies in sulphur produced in Mideast Gulf countries — and by extension sulphuric acid — a critical input for copper and cobalt leaching in the central African copperbelt, nickel leaching in Indonesia and lithium extraction and refining globally. Roughly half of global seaborne sulphur trade transits the strait of Hormuz. With Middle Eastern refinery operations disrupted and shipping largely halted, global sulphur availability has tightened sharply. Africa is particularly exposed. Nearly all sulphur imported by southern African buyers last year originated in the Middle East. Argus assessed spot sulphur prices at the key hub of Dar es Salaam, Tanzania, at $615-630/t fca on 3 March, an increase of just $20/t since 27 February, as stocks in the port are ample. But the structural vulnerability is clear. Delivered trucking costs from Dar es Salaam to Kolwezi in the Democratic Republic of Congo (DRC) are about $280/t. That implies delivered sulphur prices approaching $900/t dap Kolwezi this week. At typical 3:1 conversion ratios, that suggests sulphuric acid costs nearing $300/t, much higher than other regional benchmarks. Sulphur fob Middle East prices were assessed at $494-496/t. Both prices had experienced a slight dip ahead of the conflict but have jumped in the initial days of the war. Copperbelt heavily impacted The central African copperbelt imports roughly 2mn t/yr of sulphur, producing around 6mn t/yr of sulphuric acid for oxide copper leaching. An additional 2.5mn t/yr of acid is generated by regional copper smelters processing concentrates. Higher acid prices directly raise copper production costs in one of the world's fastest-growing supply regions. The same belt is also the centre of global cobalt production. The DRC accounts for roughly 70pc of global mined cobalt supply. Major producers include Glencore, whose Mutanda and Kamoto operations produced around 40,000t of cobalt in 2024, and China Molybdenum (CMOC), whose Tenke Fungurume and Kisanfu mines together produced more than 55,000t of cobalt last year. But the DRC has room to manoeuvre in the cobalt markets, as it has imposed an export quota on producers since late last year. There is probably a significant production overhang in the country itself, so a loosening of the policy could be used to shore up market supply in the event of a tight squeeze. The mechanism that shuts down global trade is not necessarily naval blockades but the withdrawal of war risk insurance, Robert Friedland, the founder of Ivanhoe Mines, noted this week. Seven of the 12 members of the International Group of P&I Clubs have issued cancellation notices for war risk coverage in the Mideast Gulf, extending beyond the strait of Hormuz itself to Iranian waters and the Gulf of Oman. Nickel mines and lithium refineries exposed Sulphuric acid also plays a critical role in the wider battery metals supply chain. It is a key reagent in pressure acid leach (HPAL) operations used to produce nickel from laterite ores in Indonesia, now the world's dominant source of battery-grade nickel, producing more than 50pc of global supply. Several large Indonesian HPAL projects consume millions of tonnes of sulphur annually to generate acid for leaching operations. Indonesian nickel mixed hydroxide precipitate (MHP) producers have ceased offering long-term contractual material to assess the potential impact of sulphur supply disruptions. Fuel impacts in Indonesia could also be acute. Indonesia's crude supply from the Middle East passes through Hormuz and makes up around a fifth of national demand, energy minister Bahlil Lahadalia said on 3 March. Sulphuric acid is also widely used in lithium extraction and processing. Hard-rock spodumene concentrate is typically converted into lithium chemicals using sulphuric acid roasting, while several emerging direct lithium extraction and brine conversion routes also depend on large volumes of sulphuric acid. A sustained rise in sulphur prices therefore risks feeding directly into global battery metal production costs. Again, Africa is most exposed, but a recent lithium concentrate export ban in Zimbabwe may actually relieve the pressure on other mines in the region. Australia, the world's largest lithium spodumene producer, receives most of its sulphur from Canada, so should remain far more insulated. That said, the second-largest supplier is Qatar, albeit by some distance. General inflationary pressures brought on by an extended crisis can and will affect the Chinese refining industry, which was already struggling with margin pressure from growing spodumene prices and could emerge as the weak link in the lithium supply chain. Lithium refining is an energy and reagent-intensive process. Elevated LNG and power costs in Asia, combined with rising sulphur and sulphuric acid prices used in the conversion of spodumene into lithium chemicals, could significantly increase operating costs for converters. At the same time, demand uncertainty or weaker downstream battery markets could limit refiners' ability to pass those costs on. China accounts for roughly 80pc of global lithium chemical refining capacity, meaning that any sustained pressure on Chinese converters would have disproportionate consequences for global lithium supply. By Thomas Kavanagh & Fenella Rhodes Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Al price forecasts hit $4,000/t on Middle East conflict

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