The Unfoilable Rise of China: Aluminum and the New Energy Order

On March 28, 2026, Iranian missile and drone strikes hit two of the world’s largest aluminum smelters: Emirate Global Aluminum’s (EGA) Al Taweelah plant in Abu Dhabi and Aluminum Bahrain’s (Alba) facility in Monama. By the time the smoke cleared, aluminum on the London Metal Exchange (LME) had jumped 6% to $3,481 per tonne, a four year high. The story barely made the front page. 

In a conflict already defined by the largest disruption to the global energy supply since the 1970s, the aluminum strikes mark a shift in strategy from logistics disruption to permanent capacity destruction. Unlike oil shortages, which the United States can weather, these aluminum strikes expose a weakness in an already-broken American supply chain – and a Chinese manufacturing colossus reaping the benefits of the chaos.

Why Aluminum

Aluminum is, in a sense, solidified energy. Producing it requires enormous quantities of electricity, more per-unit output than almost any other industrial process. Artem Volynets, CEO of ACG Metals and co-founder of Rusal, the Russian aluminum giant, explained further in an interview with The Gate: “You cannot really produce aluminum in Western Europe without losing money, or in North America, unless you have some privileged long term, cheap electricity.” Accordingly, the Gulf states, sitting atop oceans of cheap gas, became among the world’s dominant producers. 

Even before fighting began over the Strait of Hormuz, aluminum was strategically significant as the skeleton of the clean energy transition. Solar panel frames are made of aluminum; so are electric vehicle (EV) body shells and high voltage transmissions. In fact, military drones are only light enough to fly because they are made of aluminum. The transition away from fossil fuels is, in a physical sense, an aluminum transition. As such, any serious disruption to supply poses a legitimate threat to the infrastructure of the future. 

From a geopolitical standpoint, China dominates. The country produces roughly 60% of the world’s aluminum thanks to two decades of state-directed, heavily subsidized industrial policy. In fact, the Chinese government prioritized aluminum, going as far as defying conventional economic logic to place smelters next to coal mines. Provincial governments were even rewarded for GDP and employment figures rather than efficiency. 

The result, as Volynets watched from inside Rusal, was stunning: “When we built Rusal, China barely produced any aluminum. Listing our company in Hong Kong, we sought to supply China. Well, it turns out China doesn’t need aluminum.” By this year, China has become so dominant that it imposed a self-limiting production gap of 45.5 million tonnes per year. 

That cap served as a release valve for global aluminum markets. China could loosen its restrictions, restrict idle smelters and flood the market back to equilibrium. Yet heading into 2026, domestic demand from EVs, solar manufacturing and AI data center construction has absorbed China’s production capacity. The world’s aluminum markets, now sitting at historically low inventory levels, lost their buffer when they would need it the most. 

The Broken Gulf Production Chain

To understand what the March 28 strikes destroyed, it helps to trace aluminum’s journey before the war interrupted it.

The Gulf smelters — EGA’s Al Taweelah and Aluminum Bahrain (Alba) foremost among them — were built to exploit cheap natural gas and maritime access. They import alumina, a white powder refined from bauxite mined in Guinea and Australia, through the Strait of Hormuz. Then they smelt it into aluminum using gas-fired electricity, exporting the finished metal by sea to manufacturers around the world. When Iran closed the Strait at the end of February, that chain grinded to a halt. 

The market began to adjust before the bombs started to fall. By March 15, Alba cut 19% of its 1.6 million tonne annual capacity as an emergency measure, citing the shipping disruption. EGA shifted to trucking metal overload through Oman at a much higher price. When the strikes hit, EGA confirmed “significant damage” to Al Taweelah and said restoring full output could take a year. 

This timeline reflects a physical reality Volynets described with clarity: “If you turn the electricity off, which feeds the smelter, the cells that produce aluminum freeze. It’s not just about turning it on again. You literally may have to build another plant.” The two facilities together had produced more than 3.2 million tonnes of aluminum annually. In comparison, the United States produced 660,000 tonnes in 2025.

China’s Windfall

While Gulf producers were assessing rubble and rerouting trucks, China was absorbing the windfall from the other side of the supply chain.

The ongoing war is paradoxically good for China, not because Beijing is a geopolitical antagonist of Washington, but because the structure of the clean energy economy is tilted so heavily in China’s favor that disruptions to alternative sources of aluminum accelerate its advantage. 

David Hart, a senior fellow for climate and energy at the Council on Foreign Relations (CFR), described the mechanism in conversation with The Gate: countries scrambling to reduce their dependence on Middle Eastern fossil fuel will turn to solar panels, batteries and EVs, of which China manufactures an overwhelming majority. 

The scale of this dominance is difficult to overstate: China accounts for approximately 85% of global solar panel supply chain and 80% of lithium-ion battery production. In March 2026 alone — the month the Iran war escalated — Chinese exports of solar technology, batteries and EVs rose 70% from the previous year. Fifty countries set new records for Chinese solar imports that month. The Philippines is one of them, and its story illustrates how quickly the logic of energy desperation overrides geopolitical loyalty.

Case Study: the Philippines

The Philippines imports 98% of its oil from the Middle East, making it among the countries most exposed by the closure of the Strait. In late March, the Philippine government declared a national energy emergency, shifting to a four day work week to reduce fuel consumption. Then, the government declared an acceleration in renewable energy permitting, bypassing red tape and traditional bureaucracy. 

The charging stations going up across Metro Manila run on Chinese hardware. The EVs filling them are largely Chinese manufactured. Dependence on China spells a deep irony for a country with an existing territorial dispute with China in the South China Sea. Moreover, the Philippines is a crucial security partner to the U.S., complicating the geopolitical ramifications of this relationship. Nonetheless, the Philippines has deepened its economic dependence on Beijing because the alternative — continued reliance on Middle Eastern oil — has become untenable.

Hart is careful not to present this as irreversible. “I wouldn’t say it’s permanent,” he said, when asked whether the China electrostate-U.S. petrostate divide was closing for good. But he is not optimistic about the pace. “The U.S., as far as I can tell, doesn’t yet have a credible strategy to counter.” 

Two Views of What Comes Next

Volynets, with a commodities focus, takes the long view. He believes that markets will eventually correct. After all, Bauxite is abundant. Capital flows toward high prices. New producers will emerge to fill the gap. “You cannot redefine the global supply chains very quickly,” he said, “but sooner or later, the natural commodity flows will be restored.” On a long enough horizon, the aluminum market finds equilibrium.

Hart, the policy analyst, is less reassured by the long horizon, partly because the gap China has opened in clean energy manufacturing is about more than current production capacity. It is about accumulated knowledge, software and the kind of ecosystem advantages that do not transfer easily — or quickly. “China is also increasingly able to supply software that allows grid operators to manage a diverse and variable mix of renewable and other resources,” he wrote in his CFR piece. “Chinese state-owned firms will even build and manage an entire regional or national grid.” The lead China has built is not merely a factory lead, but an institutional one as well.

As of early May, aluminum futures on the LME are trading near $3,632 per tonne, up nearly 48% year-over-year. EGA’s Al Taweelah remains offline, and Alba is suspended. The $4 billion smelter that EGA and Century Aluminum had planned to build in Inola, Oklahoma — supposed to be the first new primary aluminum smelter in the United States in nearly 50 years — faces an uncertain future now that EGA’s home operations are materially impaired. 

The war that everyone is watching through the lens of oil is also a war about what powers the world after oil. In that war, the metal nobody is watching may turn out to matter most of all.

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