Middle East Conflict Reshapes Global Aluminum Supply Chain
A six-month-long military conflict between the United States, Israel and Iran has severely disrupted aluminum production capacity across the Gulf region, creating substantial supply gaps in the global aluminum supply chain. Amid the supply crunch, China has rapidly evolved into a critical swing supplier for Western markets. As the world’s largest aluminum producer, China has registered a notable surge in exports of primary aluminum, aluminum alloys and semi-finished aluminum products this year. The robust export growth has effectively offset supply losses from the Middle East in the short term and triggered a sharp correction in London Metal Exchange (LME) aluminum prices.
In the first half of 2026, China’s aluminum alloy exports nearly doubled year-on-year to 238,500 tons, marking a milestone as the country became a net exporter of aluminum alloys for the first time in June. Exports of aluminum semi-finished products rose 18% year-on-year to 3.2 million tons, hitting a single-month record of 695,000 tons in June alone. Meanwhile, primary aluminum exports increased 32% to 38,400 tons. Notably, a large portion of these primary aluminum shipments are Western aluminum stocks previously stored in bonded warehouses that have re-entered Western markets, rather than newly increased domestic supply capacity.
Domestically, China’s aluminum market is facing mounting supply pressure in 2026. Domestic aluminum demand remained stagnant in the first half of the year, dragged by a sluggish traditional construction sector, with Citi’s industry tracking index edging down 0.4% year-on-year. In contrast, China’s primary aluminum output grew 2.2% year-on-year, pushing smelting capacity close to and even slightly above the 45 million-ton national policy ceiling.
Global aluminum supply chain, Gulf aluminum production disruption, China aluminum exports, LME aluminum price trend, aluminum alloy swing supplier, global aluminum manufacturing shift, 2026 aluminum market analysis
