Aluminium Bahrain Profits Surge as Prices Offset War-Linked Output Losses

Aluminium Bahrain

Aluminium Bahrain profits rose sharply in the first quarter as higher London Metal Exchange aluminium prices and stronger delivery premiums outweighed lower production and sales volumes. The company reported profit of 75.3mn Bahraini dinars, more than four times the level recorded a year earlier.

Aluminium Bahrain profits were supported by a 22% year-on-year increase in average LME three-month aluminium prices to $3,195/t. Stronger regional premiums also helped lift earnings during a period of tightening aluminium supply.

Aluminium Bahrain profits still fell by almost a third from the previous quarter because of production disruption and shipping constraints linked to the Iran war. The company’s output and deliveries both declined as the Strait of Hormuz disruption affected raw material and product flows.

The result shows how aluminium producers can benefit from higher prices during supply shocks, while still facing direct operational pressure when logistics and plant reliability are disrupted.

Hormuz Disruption Cuts Alba Output and Sales

Alba produced 339,734t of aluminium in the first quarter, down 14% from a year earlier. Sales fell by 17% to 312,563t over the same period.

The volume decline followed Alba’s decision on 16 March to shut three reduction lines totalling about 300,000 t/yr of capacity. That represented around 19% of the company’s total output capacity.

The shutdown was a response to supply constraints caused by shipping delays through the Strait of Hormuz. The waterway is critical for Gulf industrial supply chains, including alumina, carbon products, spare parts and aluminium exports.

Alba’s facilities were then damaged by a missile strike on 28 March, adding physical asset risk to the logistics disruption. This turned a regional shipping issue into a direct production and repair challenge.

Despite lower volumes, value-added products remained important. They accounted for 71% of Alba’s sales, unchanged from a year earlier.

That product mix matters because value-added aluminium typically carries better margins and stronger customer relationships than standard ingot. In a disrupted market, maintaining value-added sales helps protect earnings quality.

Dunkerque Deal Could Expand Alba’s European Footprint

Alba’s agreement to acquire Aluminium Dunkerque in France adds a strategic European dimension to its current operating challenges. The company announced the acquisition plan on 4 March and signed a share purchase agreement on 6 May.

The deal remains subject to regulatory approval. If completed, it would give Alba a major European aluminium production asset at a time when western buyers are prioritising supply security.

The acquisition could also diversify Alba’s geographic risk. Current disruption in the Gulf has shown the vulnerability of aluminium producers exposed to Middle East shipping routes and regional conflict.

A European asset would give Alba closer access to automotive, packaging, construction and industrial customers in the region. It could also support the company’s value-added product strategy.

However, the timing is complex. Alba must manage reduced output, damaged facilities and supply-chain disruption at home while pursuing a major overseas acquisition.

For the aluminium market, Alba’s first-quarter result reinforces the current contradiction. Prices and premiums are high because supply is tight, but the same disruption creating stronger pricing is also cutting physical production.

The key issue is how quickly Alba can stabilise operations and restore capacity. If Middle East disruption continues, Gulf aluminium supply could remain constrained, supporting premiums but limiting volumes available to customers.

The Metalnomist Commentary

Alba’s quarter shows that higher aluminium prices cannot fully offset operational exposure to war, shipping disruption and plant damage. The Dunkerque acquisition may become more strategically valuable if Gulf producers need geographic diversification to protect long-term customer supply.