Aluminium stocks jump up to 10% as global supply disruptions lift prices – News Air Insight

ET Intelligence Group: Shares of aluminium producers have gained 3-10% over the past week, helped by a sharp rally in global aluminium prices following plant shutdowns in Qatar and Bahrain and supply disruptions due to closure of the Strait of Hormuz. The London Metal Exchange (LME) aluminium prices have jumped 7.8% in a week, taking total gains to around 9% in 2026 so far. Higher prices are set to benefit Indian producers such as National Aluminium Company (Nalco), Hindalco and Vedanta, as improved realisations strengthen their earnings.

Every $100 per tonne increase in aluminium price boosts operating profit before depreciation and amortisation (Ebitda) of Nalco and Hindalco by 5.5% and 4%, respectively, noted PL Capital in a report. LME aluminium, which closed at $3,385.5 per tonne on Tuesday, has risen by about $246 per tonne over the past week and is up roughly $370 per tonne since the start of the year.

Indian aluminium firms will also benefit given the integrated nature of their operations wherein they control the value chain from bauxite mining to alumina refining and aluminium smelting. For example, Nalco has captive coal mines that supply nearly 57% of coal requirements, helping insulate the company from coal price volatility and supply disruptions.

Shares of Nalco have risen 4% while Vedanta and Hindalco are up over 3% in a week. Shares of Arfin India, which is into aluminium recycling, have surged up to 10 % during the period.

Qatar’s aluminium producer Qatalum has begun a controlled shutdown of its production from March 3, with the closure expected by month-end and a full restart likely to take 6-12 months. Bahrain’s Aluminium Bahrain has also declared force majeure on supply contracts.

According to PL Capital, if the current situation persists it is expected to increase the global aluminum deficit and lead to higher aluminum prices in the first half of FY27 as global stocks are already at lower levels.

The Gulf Cooperation Council (GCC) countries, which include Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain, account for 8.5% of global aluminium production and is the largest net exporter of primary aluminium. Most smelters in the region are not integrated for bauxite or alumina and rely on the Strait of Hormuz for their imports. The GCC exports nearly 75% of its aluminium output, which represents around 6.5% of global demand. Kotak Institutional Equities expects the aluminium market to remain in deficit through 2026-28. The broking firm notes that the Iran conflict now adds significant upside risk to its earlier deficit projections. Its base-case forecast pegs LME aluminium price at around $2,900 per tonne in FY2027-28, while a prolonged war could push both spot prices and its base-case estimates higher.