The Middle East conflict is causing cascading disruptions across metals and mining markets, with direct impacts on the availability of industrial inputs, logistics costs, and the stability of global supply chains.
According to the Wood Mackenzie report, titled The ripple effect: How conflict is impacting global metals & mining, the closure of the Strait of Hormuz and damage to regional metal processing capacities are generating primary, secondary, and tertiary impacts on various raw materials.
Marine Sulfur Under Pressure
One of the most sensitive points is the sulfur market. Wood Mackenzie warns that approximately 50% of the world’s marine sulfur supply is at risk, due to the Middle East’s importance as an exporting region for this input.
Sulfur is fundamental for industrial and metallurgical processes, especially in leaching operations used for nickel, copper, and cobalt production.
The pressure on this market comes after a period of high volatility, during which sulfur prices reached highs of up to $550 per tonne by the end of 2025.
Energy Costs Increase Pressure
The suspension of operations by major shipping companies in the Persian Gulf, reduced transit through the Strait of Hormuz, and rising fuel costs are affecting mining operators and smelters in various regions.
Wood Mackenzie notes that the conflict has halted approximately 11 million barrels per day of regional crude production and left more than 110 million barrels stored on vessels, while buyers and companies redesign supply routes with higher logistical costs.
The increase in oil, diesel, and marine fuel is eroding margins across the metals and mining supply chain.
Aluminum and Steel Face Direct Impacts
Aluminum is among the most exposed metals. According to Wood Mackenzie, the Middle East could lose up to 3.5 million tonnes of aluminum production by 2026, due to damage to electrical facilities, emergency shutdowns, and impacts on major smelters.
Facilities such as EGA Al Taweelah in the United Arab Emirates and ALBA in Bahrain have experienced capacity disruptions.
In steel, regional production also shows deterioration. Middle East crude steel production fell by 33% in March, while Iranian steel mills recorded a 55% drop.
Nickel, Copper, and Zinc Also Feel Effects
The Indonesian high-pressure acid leaching sector, linked to nickel, is one of the most vulnerable to sulfur shortages.
In copper, the direct global impact is more limited, as the loss of Iranian production and regional disruptions represent less than 1% of the world’s supply.
In zinc and lead, the disruption of transport from the Persian Gulf could reduce Iranian concentrate flows to China, which accounted for more than 5% of its zinc concentrate imports in 2025.
Integrated Producers Will Have an Advantage
Wood Mackenzie warns that even if the conflict were to end immediately, resolving the accumulated disruptions in global supply chains could take months.
The consultancy anticipates greater divergence among producers. Integrated companies, with localized or secure input sources, would be better positioned to withstand the current scenario.
In contrast, operations dependent on long-distance marine raw materials would face persistent restrictions, volatile margins, and increased exposure to logistical risks.
Source: https://www.woodmac.com/
Photo: Shutterstock
