Alcoa Corporation (NYSE:AA), the Pittsburgh-based aluminum and alumina producer, surged roughly 11% this morning after Iran’s Revolutionary Guard Corps struck aluminum smelters in Bahrain and Abu Dhabi over the weekend, sending LME aluminum as high as $3,492 per tonne in early trading, according to Bloomberg.
Century Aluminum Company (NASDAQ:CENX), the other major U.S.-listed producer, was up roughly 10% on the same move.
The IRGC hit Aluminum Bahrain’s facility, the world’s largest single-site smelter at 1.6 million metric tons of annual capacity, and Emirates Global Aluminum’s Al Taweelah site. EGA reported “significant damage,” according to CNBC.
Aluminum Is The New Oil
Aluminum Bahrain, the world’s largest single-site aluminum smelter, had already cut 19% of production on March 15 because of reduced traffic through the Strait of Hormuz.
The IRGC said the hits were payback for strikes on Iranian steel plants.
Some are now calling aluminum the new oil, but the difference is that there is no strategic aluminum reserve. When a smelter goes cold, it stays cold for months.
The U.S. gets 21% of its imported aluminum from the UAE and Bahrain and only produces about a third of what it needs domestically. As Benzinga previously reported, that gap is only getting worse as AI data centers gobble up the cheap power aluminum smelters need to survive.
What Prediction Markets Say
On Kalshi, the Strait of Hormuz normalization contract gives 49% odds of tanker traffic returning to pre-war levels before June 1st. By 2027, the odds improve to 72%.
On Polymarket, the chance of a ceasefire between Iran and the US is at 47% before May 31st, and 60% before June 30th.
Pakistan said Sunday that both the U.S. and Iran expressed confidence in Islamabad to host direct talks. Tehran has rejected Washington’s 15-point demand list as unrealistic. The weekend smelter strikes suggest Iran may be broadening targets beyond military infrastructure to Gulf economic assets, a shift prediction market pricing on the war’s duration may not yet reflect.
JPMorgan upgraded Alcoa to neutral earlier this month with a $68 price target. UBS raised its forecast to $70. If the war continues, this forecast might seem quaint.
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