Despite Iran's announcement of commercial vessel access through the Strait of Hormuz, which led to a decline in LME aluminum prices, concerns over production resumptions should not be prematurely factored in. Since March, production halts have included Qatar's 265,000 tons due to power shortages, Bahrain's 300,000 tons reduction at Aluminum Bahrain due to alumina shortages, a 1.6 million ton stoppage at Emirates Global Aluminium's (EGA) Al Taweelah facility caused by an "uncontrolled shutdown," and Mozambique's 520,000 tons following the expiration of a power contract. The Middle East accounts for approximately 9% of global primary aluminum production, and aluminum smelting is an extremely electricity-intensive industry. Therefore, risks such as blockades in the Strait of Hormuz, shipping disruptions, attacks on smelters, and force majeure declarations can quickly amplify market concerns over a "break in spot supply." According to a research report from China Securities, while shipping access may enable the delivery of materials to aluminum plants in Bahrain and Qatar, potentially restoring 600,000 tons of capacity within three months, the restart of EGA's idled equipment is expected to take no less than 12 months. The actual production losses resulting from the conflict are tangible and should be reflected in pricing. There is no need for excessive concern over the depth of price corrections, especially given the offsetting effect of improving market sentiment. From the perspective of Wall Street financial giant JPMorgan, the aluminum market is transitioning from an old narrative of long-term surplus to a new one dominated by production disruptions, limited substitution options, and regional supply imbalances. In this context, a target price of $4,000 per ton is no longer an aggressive scenario but a natural outcome of an expanding supply gap. JPMorgan forecasts that LME aluminum prices will surpass $4,000 per ton in the coming months, reaching $3,800 per ton in the second quarter, with an annual average of $3,500 per ton. Hong Kong-listed stocks related to the aluminum industry chain include CHINAHONGQIAO (01378), CHALCO (02600), Innovation Industrial (02788), and Nanshan Aluminum International (02610).
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