On June 24th, market analysts stated that it will take a long period of time for the aluminum industry production and logistics transportation in the Gulf Cooperation Council (GCC) region to fully return to normal, and multiple uncertainties continue to disrupt global aluminum supply and price trends.

Alpha Mena analysts bluntly stated that even if the relevant peace agreement is implemented, there are significant implementation risks in subsequent signing and verification, production line restart and operation. From the perspective of repair cycle, under optimistic circumstances, it would take 3 to 6 months to repair damaged production facilities; Referring to the history of industrial recovery after past conflicts, it often takes 6 to 12 months for regional aluminum production capacity to fully recover. Currently, the operating rates of several core aluminum companies in the Gulf, such as Alba, EGA, and Qatarum, are only maintained at 30% -60%. Institutions predict that it will be difficult for the region to achieve full production capacity resumption before the fourth quarter of 2026.

The Vice President of Research at SICO Bank added that the current complex variables of port vessel congestion, cargo backlog, logistics congestion, and downstream buyers’ wait-and-see adjustments are intertwined, making it difficult to accurately predict the time window for the industry chain to return to normalcy, and the short-term supply disturbance is difficult to completely resolve.

Supply side disruptions have continued to support aluminum prices, and Alpha Mena has given price predictions: if relevant agreements are successfully reached, short-term aluminum prices will experience a 5% -10% pullback, and London Metal Exchange (LME) aluminum prices may explore the range of $2850-2950/ton to find support; The market is likely to stabilize from July to September, with the operating range locked at 2900-3050 US dollars per ton.

On the supply and demand side, the Gulf region holds a crucial position in the global aluminum supply system. Data shows that the daily production of GCC primary aluminum in April this year was only 62% of the pre conflict level; The total production of primary aluminum in this region accounts for 6% -8% of the global total, and is also an important source of imports for many countries, supplying 19% of the total aluminum imports to the European Union, 20% -21% to the United States, and 28% to Japan. The progress of the Gulf aluminum production capacity repair directly affects the supply of raw materials in Europe, America, Japan, and many other places, and will continue to form a support base for international aluminum prices in the medium and long term.

Overall, the low operating status of Gulf aluminum companies may continue, and short-term benefits may lead to a pullback in aluminum prices. However, the significant proportion of global supply in the region will limit the downward space for prices, and aluminum prices in the third quarter may mainly fluctuate within a range.