Vitol sails stranded aluminium cargo out of Strait of Hormuz

Vitol Group has shipped a stranded cargo of aluminium out of the Strait of Hormuz, in an early sign of supply relief for buyers rocked by shortages since the start of the Iran war.

The trading house sailed the Lowlands Corso bulk carrier through the south of the strait late in the afternoon local time on Friday, according to shipping data and a person familiar with the matter. The ship is laden with about 35,000 tonnes of aluminium produced by Emirates Global Aluminium, a cargo worth about $110m at current spot prices. It loaded in Abu Dhabi in late February and had since been anchored in various locations off the western coast of the UAE. A Vitol spokesperson declined to comment.

The voyage is an early sign of normalisation in trade flows from the region as the US and Iran negotiate a permanent end to the war. The aluminium market was roiled by the suspension of trade through the strait, with buyers worldwide racing to secure replacement cargoes and smelters seeking to reconfigure supply chains to move metal out via alternative ports. Prices surged to a four-year high in early June, and the resumption of regional exports will be a key influence on the market in the weeks ahead. Aluminium tends to leave the Middle East in containerised shipments, and in recent weeks smelters have trucked growing volumes for shipment out of ports in Oman and Saudi Arabia. The Lowlands Corso is the first known vessel to ship aluminium in bulk through the strait since the start of the war, according to the person familiar with the voyage.

Meanwhile, unexpectedly large volumes of raw materials have been shipped into smelters in the region, helping to avert widespread closures that threatened to plunge the industry into crisis. There are still worries about the stability of trade through Hormuz, particularly after a vessel was hit by an unidentified projectile on Thursday. Some analysts and traders foresee a residual squeeze on global supplies, while others expect Middle Eastern exports and output to accelerate swiftly, helping to replenish global inventories that have been aggressively drawn down in some consumer markets. The Lowlands Corso is set to unload in New Orleans, with US manufacturers paying by far the highest aluminium prices in the world because of tariffs and regional shortages worsened by the war.

Photo: Calistemon / Wikimedia Commons (CC BY-SA 4.0).