Vitol sails stranded aluminum cargo out of Strait of Hormuz

Vitol Group has shipped a stranded cargo of aluminum 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 successfully sailed the Lowlands Corso bulk carrier through the south of the strait late afternoon local time on Friday, according to shipping data and a person familiar with the matter. It is laden with about 35,000 tons of aluminum produced by Emirates Global Aluminium PJSC.

The vessel loaded its cargo in Abu Dhabi in late February, ship-tracking data show. Since the war started, it has been anchored in various locations off the western coast of the UAE, carrying an unusually large cargo of aluminum worth about $110 million at current spot prices.

A spokesperson for Vitol declined to comment.

Its voyage out of the strait is an early sign of a normalization in trade flows from the region as the US and Iran negotiate a permanent end to the war. The aluminum market was roiled by the suspension of trade through the strait, with buyers worldwide racing to secure replacement cargoes. Smelters sought to reconfigure their 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 trajectory of the market in the weeks ahead.

Aluminum tends to leave the Middle East in containerized shipments, and in recent weeks smelters have trucked growing volumes of metal for shipment out of ports in Oman and Saudi Arabia. The Lowlands Corso is the first known vessel to ship aluminum in bulk through the strait since the start of the war, said the person familiar with the voyage, who asked not to be identified because the matter is private.

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.

To be sure, there are ongoing worries about the stability of trade through Hormuz, particularly after a vessel was hit by an unidentified projectile on Thursday. Some aluminum analysts and traders still 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 its cargo in New Orleans, the person said. US manufacturers are paying by far the highest aluminum prices in the world because of tariffs and regional shortages exacerbated by the war.

(By Mark Burton)