AMU
July 2, 2026
AMU Community Chat: Tanners says recent price drop a 'head scratcher'
Written by Stephanie Ritenbaugh
This piece was first published by Aluminum Market Update (AMU), SMU’s nonferrous sister publication. To learn about AMU, visit their website or sign up for a free trial.
The recent retreat in aluminum prices has been a “head scratcher” as the Iran war continues to disrupt output from an important production region.
“I don’t think it makes sense,” Wells Fargo Managing Director Timna Tanners said during a Community Chat on June 24. The webinar was co-hosted by SMU and AMU. A replay can be found here.
After hovering around record highs near $4,000 per metric ton, LME prices have slipped to around $3,100 to $3,150.
Countries in the Gulf Cooperation Council (GCC) region comprise about 9% of global output, or 22% ex-China. “The disruption here in terms of 3 million tons or more of a 74 million ton market, those aren’t things that you flip a switch on and restart,” Tanners said.
And even before the US and Israel launched attacks on Iran earlier this year, the market had a shortfall of about 1 million tons. While other producers can step in to fill the gap, such as Indonesia or China, their output won’t meet the deficit, Tanners said.
“You’re having a massive unwind among speculators and the tourists who got into the space. But I feel like they oversold here,” she added.
This isn’t like 2022, when Russia invaded Ukraine and prices spiked but came down, Tanners noted. “People worried about supply. But actually, that supply didn’t get taken out. This is a different story.” This time, production has been taken out by the fighting and will take time to get back online.
Meanwhile, recyclers are yielding bigger profits, as margins have grown for those using scrap to make finished aluminum. “If you’re Constellium, if you’re Arconic and, Steel Dynamics/Aluminum Dynamics, and some of Kaiser, you’re making a lot of money on anything that’s recycled content,” Tanners noted.
