【Iran Crisis】Qatar Natural Gas Production Cuts Affect Aluminum Plants Goldman Sachs: Some disruptions may last a month Aluminum prices could reach $3,600

Affected by the Iran situation, QatarEnergy has temporarily halted liquefied natural gas production after its energy facilities were attacked, and later announced the suspension of several downstream industrial productions. Due to the LNG supply interruption, Norwegian aluminum producer Norsk Hydro also announced the orderly shutdown of its joint venture aluminum smelter Qatalum, which will be fully closed by the end of this month. A full restart could take up to a year. Aluminum prices on the London Metal Exchange (LME) rose about 6% this week, reaching $3,388 per ton, the highest since 2022.

Goldman Sachs research reports indicate that GCC countries and Iran together account for about 9% of global primary aluminum production, approximately 6 million tons, representing about 20% of non-Chinese output. Of these, 80% to 90% are exported through the Strait of Hormuz. Developments in regional stability could significantly impact aluminum supply by disrupting export capabilities and raw material imports. Short-term disruptions (less than a week) might theoretically push prices up by about $50 per ton, with limited impact. If disruptions extend to a month, aluminum prices could temporarily rise to $3,600 per ton.

On Tuesday (the 3rd), QatarEnergy issued a statement that the country’s largest LNG export facility was previously forced to shut down. Due to supply chain disruptions, the company decided to suspend downstream operations, including the production of urea, polymers, methanol, and aluminum.

QatarEnergy is a partner in Norsk Hydro’s local joint venture Qatalum and supplies natural gas to the smelter. With the halt of key raw material supply, Qatalum is expected to be fully closed by the end of this month. In 2025, Qatalum contributed an adjusted net profit of $135 million to Norsk Hydro.

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Aluminum production heavily depends on stable energy supply; shutdowns and reboots also take several months

Aluminum production relies on cheap and stable energy supplies. Aluminum smelters extract aluminum metal by electrolyzing alumina using natural gas. The electrolytic cells must be maintained at a high temperature of 950°C in a molten state. If natural gas supply is interrupted, causing power outages, the liquids inside the electrolytic cells solidify. Restarting by excavating the solidified cells and cleaning them can take several months.

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