Disruptions at the Strait of Hormuz are rerouting global alumina trade, positioning Chinese smelters as primary beneficiaries. As regional conflict halts shipping hubs, raw materials originally destined for Middle Eastern producers, who account for 9% of global aluminum output, are now heading to China. This influx of supply arrives as regional plants, including Aluminium Bahrain (Alba), cut production due to blocked transport routes and material shortages.

With the LME aluminum price nearing four-year highs last week, Chinese companies see record unit profits from converting this redirected alumina.

Market participants observe that these stranded cargoes are effectively entering the global market, with China’s massive industrial base serving as the main destination. Therefore, supply chain constraints outweigh demand worries, keeping market sentiment bullish.