The price of European TTF gas has risen by nearly 80 percent since the beginning of the year and is currently at €50/MWh, with the sharp price increase driven by the armed conflict between the USA and Iran. Following the attacks, QatarEnergy, which supplies one-fifth of the world’s LNG production, temporarily closed its largest terminal in Qatar.
Although the current impact on the EU is limited as Qatari LNG accounts for about eight percent of imports (while about 50 percent comes from the USA), a greater risk is the potential rerouting of gas flows to Asia instead of Europe. An additional risk to global supply chains is the closure of the Strait of Hormuz by Iran, which is why we expect significant price volatility for European gas in the coming period.
Aluminum at Four-Year High
The price of aluminum has increased by eight percent this year to a four-year high of $3,300 per ton. The price increase is also due to the armed conflict in the Middle East, as aluminum production is energy-intensive, and any significant rise in energy costs (especially oil) strongly reflects on the final price of the metal.
The Gulf countries are important producers of primary aluminum, together accounting for 8-9 percent of global production, which is why the current conflict puts significant pressure on production, given that Bahrain, Saudi Arabia, Qatar, Oman, and the United Arab Emirates are responsible for 15 percent of global aluminum exports, with the UAE being the largest and second-largest exporter of this metal.
Further escalation could significantly impact the global supply and supply chains of aluminum, increasing the likelihood of additional price rises in the global market.
