As an impact of the possible aluminium price hikes due to the intense race for aluminium from the Middle Eastern countries, including the United Arab Emirates and Bahrain, product costs will inflate for Western companies from the transport, packaging, and construction industries, fuelling an additional challenge besides high energy costs.
Although, as per the last report, the European Union may refrain from banning Russian aluminium, the bloc is expected to soon propose another package with new import bans, resulting in a supply shortage in Europe.
As per calculation, the Russian aluminium ban will leave Europe with a shortage of around 500,000 tonnes of the metal. To replenish it, the European countries will lean upon Middle Eastern countries that produced 6.2 million tonnes of aluminium or 9 per cent of global supplies last year, according to the International Aluminium Institute. Of this production, about 2 million tonnes was shipped to Europe and the United States.
Dmitri Ceres, a U.S.-based aluminium trader at PerenniAL, said: "Middle Eastern suppliers will not be able to fully substitute Europe's shortfall quickly."
