London’s aluminum market is sending the strongest signals of a supply shortage in the past twenty years.

On Monday, aluminum futures on the London Metal Exchange (LME) rose to a four-year high. At the same time, a key indicator reflecting strain in the spot market widened sharply—the spot premium to three-month futures jumped 37% to $91.50 per ton, marking the largest backwardation since 2007. This shows that traders are willing to pay extra for aluminum delivery here and now.

The immediate trigger for such a sharp change in the market was the implementation on Monday morning of the measures to blockade the Strait of Hormuz announced by the Trump administration, as well as a message from Emirates Global Aluminum (EGA), the region’s largest aluminum producer, stating that force majeure had been declared for a number of contracts. These two shocks exacerbated an already fragile global aluminum supply chain.

Double blow triggers a supply crisis
As U.S. President Trump told reporters after arriving at Andrews Air Force Base in Maryland aboard Air Force One, the U.S. armed forces will impose a blockade against Iran on April 13 at 10:00 a.m. Eastern Time (22:00 Beijing time, UTC+8). At the same time, over the past weekend, EGA announced it had declared force majeure for a number of contracts after, due to missile and drone attacks from Iran, the Al Taweelah plant was forced to halt production. According to Bloomberg, the official notice was issued on Saturday.

EGA is owned by Mubadala, an investment company from Abu Dhabi, and an investment firm from Dubai. In 2025, the volume of sales of ingot aluminum was 2.83 million tons, equivalent to approximately 4% of global production. About 9% of the global aluminum supply comes from the Middle East.