Middle East aluminum artery is pinched, will new energy vehicle prices rise?

Guangfa Futures analyst Wang Yiwen told China News on March 17 that if the blockade of the Strait of Hormuz continues, other countries such as the UAE and Iran that rely on importing alumina may also be forced to follow suit and reduce production in the next two to three weeks. This would have a significant impact on the already tight supply of electrolytic aluminum industry, with overseas supply possibly turning negative by 2026, and the global supply-demand gap could expand to the million-ton level. Wang Yiwen analyzes that even if the blockade is lifted in the short term, the recovery period for electrolytic aluminum production could last 6-12 months, and the supply gap cannot be quickly filled. In the medium and long term, aluminum prices will remain strong. If combined with production cuts and force majeure, LME aluminum is expected to hit a new high of 3700-4000 US dollars. Wang Yiwen points out that the impact of rising aluminum prices permeates the entire manufacturing industry chain, affecting multiple industries such as automobile manufacturing, power electronics, construction, and transportation. However, the most affected industry is new energy vehicles, as they have high requirements for lightweighting, and aluminum alloys are widely used in core components such as the body, battery shell, and wheels. Rising aluminum prices will directly increase manufacturing costs. Cui Dongshu, secretary-general of the China Passenger Car Association, told China News that the amount of aluminum used in a new energy vehicle is close to twice that of a fuel-powered vehicle, and overseas car companies are more significantly affected. Rising aluminum prices squeeze the profits of car companies and parts suppliers, bringing supply chain delivery risks, with greater survival pressure on small and medium-sized car companies. Regarding the specific cost of a new energy vehicle, Wang Yiwen calculated that the average amount of aluminum used in a pure electric new energy vehicle is now over 200 kilograms per vehicle. Based on the aluminum price increase of 3800 yuan/ton compared to the average price in 2025 as of March 18, the cost per vehicle is estimated to increase by approximately 760 yuan.