Petroleum coke crunch threatens global aluminium supply chain

Persian Gulf conflict raises fears of production disruptions and widening deficits across worldwide metal markets

Global aluminium production outside the Gulf region could also come under pressure if petroleum coke shortages worsen due to the continued closure of the Strait of Hormuz, according to a report by JP Morgan.

The report warned that petroleum coke, a critical raw material used in aluminium production, is emerging as a major concern for aluminium producers amid the ongoing conflict in the Persian Gulf and disruptions in shipping routes.

JP Morgan said around 20% of global petroleum coke supply is linked to the Strait of Hormuz because the material is produced during oil refining.  Prolonged disruptions in the region could therefore significantly impact global supply chains. The report noted that if shortages become severe, aluminium producers outside the Gulf may also face operational disruptions or may be forced to curtail production.   “If petroleum coke shortages become acute, additional aluminium supply outside the Gulf could face operational challenges or be forced to curtail production,” the report said. 

The aluminium market is already facing supply-side stress due to interruptions in alumina shipments to Gulf smelters. The research expects the global aluminium market to slip into a deficit of nearly 2 million tonnes in 2026 if disruptions persist. Apart from alumina, the report highlighted tightening supply conditions in both calcined petroleum coke and green petroleum coke markets following shutdowns in the Middle East Gulf region. 

Energy-linked commodities have also witnessed sharp price increases since tensions escalated in West Asia. According to the report, petroleum coke prices in the US Gulf region have already surged nearly 20% since the conflict began.

JP Morgan further cautioned that supply-demand imbalances may continue even if geopolitical tensions ease.  The report said petroleum coke production could restart faster than aluminium smelting operations, as restarting smelters may take 12 to 18 months.

The development has raised concerns across the global metals industry, particularly for manufacturers dependent on stable aluminium supplies for sectors such as automobiles, construction, packaging and renewable energy infrastructure. 

—ANI