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Petroleum Coke Shortage May Disrupt Global Aluminium Supply: JP Morgan

JP Morgan warns that petroleum coke shortages from the Strait of Hormuz closure could disrupt aluminium production outside the Gulf. Around 20% of global petroleum coke supply is affected, impacting aluminium producers globally. The global aluminium market faces a 2 million tonne deficit in 2026, with prices rising 20% in the US Gulf. Restarting aluminium smelters could take 12-18 months even after supply recovers.

Key Points: Petroleum Coke Shortage Threatens Aluminium Output: JP Morgan

  • Petroleum coke shortage from Strait of Hormuz closure threatens aluminium output
  • 20% of global petroleum coke supply affected
  • Global aluminium market faces 2 million tonne deficit in 2026
  • US Gulf petroleum coke prices up 20% since conflict started
2 min read

Petroleum coke shortage may hit aluminium production outside Gulf too: JP Morgan

JP Morgan warns petroleum coke shortages from Strait of Hormuz closure could disrupt aluminium production outside Gulf, with a 2 million tonne deficit expected in 2026.

"If petroleum coke shortages become acute, additional aluminium supply outside the Gulf could face operational challenges or be forced to curtail production - JP Morgan"

New Delhi, May 12

Aluminium production outside the Gulf region could also face disruptions if shortages of petroleum coke worsen due to the continued closure of the Strait of Hormuz, according to a report by JP Morgan.

The report said petroleum coke, an important raw material used in aluminium production, could become a major challenge for aluminium producers globally amid the ongoing conflict in the Persian Gulf.

It stated that if the Strait of Hormuz remains closed and petroleum coke shortages become severe, aluminium producers outside the Gulf may also face operational difficulties or may have to cut production.

It said, "If petroleum coke shortages become acute, additional aluminium supply outside the Gulf could face operational challenges or be forced to curtail production"

According to the report, around 20 per cent of global petroleum coke supply is affected by the Strait of Hormuz closure because petroleum coke is produced during oil refining.

The report highlighted that the aluminium market is already facing major supply disruptions due to the conflict in the Persian Gulf and disruption of shipping routes.

JP Morgan Commodities Research expects the global aluminium market to face a deficit of around 2 million tonnes in 2026.

The report added that continued disruption in alumina shipments to Gulf smelters could lead to more shutdowns in the aluminium industry.

Apart from alumina, the report said the petroleum coke market is also under pressure.

It noted that both calcined petroleum coke (CPC) and green petroleum coke (GPC) markets are currently facing supply tightness due to shutdowns in the Middle East Gulf region.

The report further stated that while many fossil fuel prices have risen sharply since the conflict started, US Gulf petroleum coke prices have increased around 20 per cent so far.

JP Morgan also warned about possible supply-demand mismatches even if the conflict eases.

According to the report, petroleum coke production may restart faster than aluminium smelting operations because restarting smelters could take 12-18 months. However, the report added that the timing of recovery in both supply and demand remains uncertain.

- ANI

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Reader Comments

S
Sneha F
The 20% price hike in US Gulf petroleum coke is just the beginning. Our aluminium companies like Hindalco and Nalco will have to pass these costs to consumers. Expect higher prices for cars, planes, and even foil packets at the local chai stall! 🚗✈️
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Michael C
JP Morgan's forecast of a 2 million tonne deficit in 2026 is a bit dramatic, but the underlying concern is real. India should use this as a wake-up call to develop our own calcined petroleum coke production. We have the refineries—why rely on Gulf imports? 🤔
K
Kavya N
I appreciate the detailed analysis, but let's not forget the human side. The conflict in the Persian Gulf is causing immense suffering. While aluminium supply chains are important, I hope diplomatic efforts succeed so that life normalises for everyone—including our colleagues in the Gulf. 🙏
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Raghav A
The comment about restarting smelters taking 12-18 months is scary. This means if we shut down now, we're in for a long recovery. The government needs to cushion strategic industries like aluminium. Maybe a temporary subsidy for petroleum coke imports from non-Gulf sources? 🇮🇳
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Sarah B
While I understand the concern, let's be honest—India's aluminium sector has been heavily dependent on imported coke for years. This is a structural vulnerability. Maybe the crisis will push us towards recycling more aluminium? That would be a silver lining. ♻️

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