by MAURA KELLER
mkeller@americanrecycler.com
The ongoing conflict involving Iran is already sending ripples through global metals markets, with some commodities reacting sharply as traders weigh the potential for supply disruptions across key transportation corridors. According to Darrell Fletcher, managing director of commodities at Bannockburn Global, the market response so far has been uneven across the base metals complex, with aluminum emerging as the notable outlier amid broader declines.
Fletcher explained that while many base metals have softened in recent days, aluminum has gained ground due to its unique geographic production footprint. “The only base metal that is higher is aluminum, which most might not initially expect,” Fletcher said. He notes that roughly 10 percent of global aluminum output comes from the Middle East, where production is heavily supported by abundant natural gas supplies that power energy-intensive smelting operations. Much of that regional production is exported through the strategically vital Strait of Hormuz, creating a direct link between geopolitical instability and aluminum supply flows. “A significant share of that material moves through the Strait,” Fletcher said, adding that disruptions to shipping routes quickly translate into supply concerns for global markets.
Early signs of strain are already emerging within the aluminum supply chain. Fletcher points out that Emirates Global Aluminum, the largest aluminum producer in the United Arab Emirates, has announced delays in shipments as the regional security situation evolves. At the same time, warehouses monitored by the London Metal Exchange are experiencing increased drawdowns, suggesting that consumers and traders may already be tapping inventories as they prepare for potential supply disruptions. “We’re seeing increased drawdowns in LME warehouses,” Fletcher said, a signal that the market may be bracing for tighter availability if shipping lanes remain constrained.
The broader concern centers on the strategic importance of the Strait of Hormuz itself. Fletcher emphasized that the narrow waterway is not only critical for metals shipments but also serves as one of the most important energy transit routes in the world. Approximately 25 percent of global oil and petroleum products pass through the strait, along with about 20 percent of the world’s liquefied natural gas shipments. Much of that LNG is destined for major Asian economies including Japan, India and China. “This is a big issue,” Fletcher said, noting that the security of the passage has immediate implications not only for energy markets but also for energy-intensive metals production worldwide. With insurers reluctant to cover vessels operating in the area, the shipping route is effectively constrained. “There will be huge pressure to keep the Strait safe and open,” he explained, “but right now it’s essentially not safe or insurable, which means it’s largely cut off.”
For scrap recyclers and metal market participants, the duration and scale of the conflict will ultimately determine whether current price movements represent short-term volatility or the start of a more sustained shift. Fletcher stresses that the market remains highly sensitive to geopolitical developments. “Both the length and depth of the conflict will determine where this heads,” he said, noting that prolonged disruption could tighten supply chains and push certain metals higher while weakening others tied more closely to industrial demand.
Industry leaders agree that scaling recycling capacity will be essential to meeting projected metal demand.
Across the metals sector, one conclusion is increasingly clear. Especially in light of the conflict with Iran, scrap is no longer peripheral to industrial growth.
Published April 2026