Aluminum Shortages Coming Soon

Peter Zeihan 8 min

The closure of the Strait of Hormuz will cause Iranian attacks on gas infrastructure to shut down Persian Gulf smelters, creating global aluminum shortages. All six facilities will probably be going offline over the course of the next month if this war continues.

Chapters

  1. 0:00

    The Aluminum Production Process

    Explains the multi-step refining of bauxite into alumina and then aluminum via electrification.

  2. 3:00

    Vulnerability of Persian Gulf Smelters

    Details how Iranian attacks on natural gas infrastructure will shut down six major smelters.

  3. 7:25

    Impact on Global Supply and US Market

    Discusses the loss of 9% global supply, high US tariffs, and severe shortages for China.

Key points

  • 0:22

    Aluminum requires multiple refining steps starting with bauxite ore.

  • 0:48

    Over 90% of alumina is converted into aluminum metal through electrification.

  • 5:55

    Six major smelters in the Persian Gulf produce roughly 9% of the world's aluminum.

  • 3:00

    Smelters rely on local natural gas for power rather than imported oil.

  • 3:00

    Iranian attacks on gas pipelines or power grids will shut down these facilities.

  • 3:00

    Saudi Arabia's smelter remains operational while others face imminent shutdown.

  • 3:00

    Bahrain and Ghatr will likely shut down within a few days due to power loss.

  • 5:02

    UAE smelters will go offline in the next week or two due to power grid attacks.

  • 5:02

    Oman's smelter is vulnerable to future Iranian strikes on Indian Ocean infrastructure.

  • 5:55

    The United States faces higher prices due to existing 50% tariffs on imports.

  • 7:25

    China will suffer permanently as it loses access to finished aluminum production.

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