China’s metals producers booked roughly $21 billion in combined profits in January-March 2026 after a Middle East conflict disrupted Gulf exports and pushed aluminium and sulphuric acid prices sharply higher. The surge was driven by production interruptions at Gulf aluminium plants and constraints on sulphur feedstock shipments through the Strait of Hormuz, market analysts and industry reporting say. Bloomberg and market trackers cited record copper and near-record aluminium prices in the quarter, while Argus Media reported sharp premium rises that favoured non-Gulf exporters. Argus projects premiums and regional price dislocations are likely to persist as shipping constraints and higher logistics costs continue to bite.

China’s major smelters and refiners posted an unusually strong first quarter as global price moves gave exporters an unexpected tailwind. Industry reporting, summarised by Oilprice.com, put combined profits for Chinese metals firms at about $21 billion for January-March 2026, a level not seen in a decade for the sector.

How the Gulf shock fed Chinese margins

Supply shocks in the Gulf were the immediate trigger. Argus Media’s March market note said attacks and energy-supply disruptions reduced runs at key facilities and constrained shipments through the Strait of Hormuz. Argus calculated that the Middle East supplies roughly 8-9 percent of global aluminium output and is also a major source of sulphur, the feedstock used to make sulphuric acid that's essential to copper and nickel processing.

Argus cited two concrete disruptions. It reported that Qatar’s Qatalum halted production following an LNG supply cut by QatarEnergy. Argus also said Aluminium Bahrain, known as Alba, declared force majeure on exports because of shipping disruptions. Those operational details appear in Argus’s markets coverage.

The result was immediate and visible in prices. Argus recorded the London Metal Exchange three-month aluminium price at $3,372 per tonne on 4 March 2026, about 6.6 percent higher than before the outbreak of the conflict. Argus also reported that the European P1020 duty-paid premium jumped roughly 20 percent to $410-440 per tonne on the same date. In the US, Argus noted record-high Midwest premiums near $1.06-1.08 per pound, and it flagged sizeable increases in Asian cif premiums for Thailand and Vietnam as regional flows tightened.

Market mechanics and the limits of the shock

The disruption was not simply about plants stopping. Market commentary collected by Argus underlined higher freight and insurance costs, logistical rerouting and elevated risk premia as additional drivers that fed into availability and price.

Mastheads

Those extra costs raised the value of available aluminium stocks and pushed buyers toward suppliers outside the Gulf, including Chinese exporters.

Bloomberg and other market trackers separately reported copper reaching an all-time high in the first quarter, and aluminium climbing to its highest levels since 2022. Those moves underpinned margins for Chinese producers, who were able to convert stronger world prices into higher earnings as exports picked up.

Oilprice.com carried the $21 billion profit tally and attributed its summary to Bloomberg and market commentary. Oilprice also quoted market firm Britannia Global Markets warning that Iranian strikes on Gulf aluminium plants risk pushing an already fragile market into crisis. Britannia’s note, as reported by Oilprice, said constrained production elsewhere had eroded inventories, leaving little buffer against further shocks.

One market indicator reported by Oilprice, via Reuters, suggested London Metal Exchange warehouse stocks had fallen by about 60 percent since May 2025. That figure sits alongside Argus’s premium and price data to paint a picture of tightened physical availability, although the warehouse-stock stat and some operational claims are present only in single-source reporting in this sample of market coverage.

It is worth stressing what the reporting does and doesn't show. The immediate winners were exporters outside the Gulf and sellers holding supply that could be diverted into constrained markets. But Argus and other analysts emphasised that the squeeze reflected a mixture of production outages, logistical friction and higher risk premia, rather than a single collapse of underlying global metal production.

For China, the timing was favourable. Elevated aluminium and copper prices in the first quarter supported Chinese producers’ margins and volumes. The combination of higher premiums, stronger LME prices and disrupted Gulf flows created an environment where Chinese output met demand that Gulf suppliers couldn't fulfil at short notice.

Some operational details remain reported in only one outlet. The $21 billion Q1 profit figure and its attribution to China’s larger producers appear in Oilprice’s coverage, which cites Bloomberg and market comment. The specific accounts of Qatalum’s controlled shutdown and Alba’s force majeure declaration are supplied in Argus Media’s reporting.

Market participants are watching how long the disruption will persist. Argus projects that premiums and regional price dislocations are likely to continue rising as shipping constraints and elevated logistics costs remain in place. If that scenario plays out, non-Gulf suppliers could sustain higher revenues and physical aluminium availability in impacted markets could stay tight.

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Argus projects premiums and regional price dislocations will persist while shipping constraints and logistics costs remain elevated, a dynamic that could sustain higher revenues for non-Gulf suppliers and leave physical aluminium supplies tight.

This article was created with AI assistance.