If the Middle East's aluminum supply artery is cut off, will the prices of new energy vehicles increase?

The Strait of Hormuz, the "lifeline" of the Middle East's aluminum industry chain, is now being tightly strangled by geopolitical conflicts.

According to a report by China Media Group's Global Information Radio on March 11, the Persian Gulf region accounts for about 8% of the global aluminum supply. Qatar Aluminium has started to shut down some production lines, while Aluminium Bahrain has announced a suspension of shipments due to transportation disruptions.

A research report by CSC Financial on March 15 cited data from industry research institution Aladdin as saying that in 2025, the six Middle Eastern countries had a total installed capacity of 7.051 million tons of electrolytic aluminum and a production volume of 6.927 million tons, accounting for 9.2% of the global total production.

Wang Yiwen, an analyst of non - ferrous metals at GF Futures, told China News Service on March 17 that if the blockade of the Strait of Hormuz continues, countries such as the UAE and Iran, which rely on imported alumina, may also be forced to follow suit and cut production in the next two or three weeks. This will have a huge impact on the electrolytic aluminum industry, which is already facing a tight supply. The overseas supply may turn into negative growth in 2026, and the global supply - demand gap may widen to the level of one million tons.

As the supply contracts, prices respond immediately. According to Wind data, on March 13, the aluminum price on the London Metal Exchange (LME) soared strongly, reaching a maximum of $3,528.5 per ton, hitting a new high since 2022. The LME aluminum spot settlement price on that day was $3,520 per ton. On the same day, the opening price of the main Shanghai aluminum contract in China was 25,300 yuan per ton, with a maximum price of 25,370 yuan per ton, successfully breaking through the 25,000 - yuan mark. The average price of spot aluminum in China reached 25,100 yuan per ton, about 4,100 yuan higher per ton than the same period last year.

By March 18, the LME aluminum price closed at $3,347.5 per ton. The main Shanghai aluminum contract in China closed at 24,800 yuan per ton, and the average price of spot aluminum in China was 24,450 yuan per ton.

Since the US - Israeli attack on Iran on February 28, as shown by Wind, as of March 18, the LME aluminum spot settlement price has risen by about $214 per ton, and the average price of spot aluminum in China has risen by about 820 yuan per ton.

Wang Yiwen analyzed that even if the blockade is lifted in the short term, the recovery cycle of electrolytic aluminum production after shutdown is as long as 6 - 12 months, and the supply gap cannot be quickly filled. In the medium and long term, the aluminum price will maintain a relatively strong oscillation. If production cuts and force majeure events occur intensively, the LME aluminum price is expected to hit a new high of $3,700 - $4,000.

Wang Yiwen pointed out that the impact of rising aluminum prices runs through the entire manufacturing chain, imposing cost pressures on multiple industries such as automobile manufacturing, power electronics, and construction and transportation. However, the new energy vehicle industry is the first to bear the brunt because new energy vehicles have extremely high requirements for lightweighting. Aluminum alloys are widely used in core components such as the vehicle body, battery shell, and wheels. Rising aluminum prices will directly drive up manufacturing costs.

Cui Dongshu, the secretary - general of the China Passenger Car Association, told China News Service that the aluminum consumption per new energy vehicle is nearly twice that of a fuel - powered vehicle, and overseas car - makers are more significantly affected. Rising aluminum prices squeeze the profits of car - makers and parts suppliers, bringing risks to the supply - chain delivery, and putting greater survival pressure on small and medium - sized car - makers.

Specifically regarding the cost of a single new energy vehicle, Wang Yiwen estimated that currently, the average aluminum consumption per pure - electric new energy vehicle is more than 200 kilograms. Calculated based on the fact that the aluminum price on March 18 is 3,800 yuan per ton higher than the average price in 2025, the cost of a single vehicle will increase by about 760 yuan.

Zhang Hong, a member of the expert committee of the China Automobile Dealers Association, said that the rise in international aluminum prices directly leads to an increase in the raw material procurement costs of automobile enterprises. He analyzed that the costs of the vehicle body and structural parts, battery trays and shells, and motor and electronic control systems will all rise, driving up the overall cost of the battery system.

Although the cost of car - making may increase, consumers may not have a obvious perception. Cui Dongshu said that the current automobile market is highly competitive, and short - term cost increases are difficult to be fully passed on to the end - consumers, so there will be no industry - wide price hikes. If the aluminum price remains high in the long term, car - makers may reduce discounts or make structural price adjustments to digest the pressure.

Wang Yiwen believes that the aluminum consumption of pure - electric models is still increasing, and they are particularly sensitive to changes in aluminum prices. If the end - consumers cannot accept price hikes, the cost will only squeeze the profits of car - makers.

In the view of the industry, the key variable in dealing with the cost pressure of new energy vehicles caused by rising aluminum prices lies in the cost - management ability of enterprises themselves.

Zhang Hong believes that rising aluminum prices may prompt car - makers to hedge price risks through means such as supply - chain integration and hedging. Some enterprises may accelerate the localization of the supply chain to reduce procurement costs and supply uncertainties.

Zhang Hong suggested that car - makers should deal with rising aluminum prices from three aspects: on the supply - chain side, sign long - term agreements with suppliers to lock in prices, expand procurement channels to reduce costs, and adopt JIT (Just - In - Time Management) inventory management to control risks; on the technology side, optimize designs to reduce aluminum consumption, explore alternative materials such as magnesium alloys and carbon fibers, and improve processes to increase the utilization rate of aluminum materials; on the market side, adjust the product structure to increase the proportion of hybrid models, adjust prices moderately but with caution, and expand overseas markets to disperse cost pressures.

Cui Dongshu pointed out that car - makers can stabilize the supply by signing long - term agreements and diversifying procurement; reduce aluminum consumption and costs by means of integrated die - casting, material substitution, and increasing the use of recycled aluminum; hedge price fluctuations through hedging, and optimize the product structure to increase the proportion of high - end models.

Wang Yiwen suggested that sellers (primary aluminum enterprises) should use hedging to lock in profits, maintain long - term agreement customers to smooth out cyclical fluctuations, and ensure the stable supply of raw materials. Buyers (new energy car - makers) should lock in prices by signing long - term agreements, use futures hedging to stabilize price fluctuations, and establish an agile decision - making mechanism to flexibly adjust procurement according to prices.

The views in this article are for reference only and do not constitute investment advice. Investment is risky, and you should be cautious when entering the market.

This article is from the WeChat public account "China News Service" (ID: jwview), author: Li Ziman, published by 36Kr with authorization.