Muscat: The UK aluminium sector is facing a steep rise in electricity costs that is undermining its ability to capitalize on a global supply shortage triggered by the fallout from the US-Israel war against Iran, despite surging international demand for the metal.
According to Oman News Agency, industry sources report that several aluminium smelters in the Gulf have gone offline or seen exports disrupted due to the US-Israel war against Iran and its related tensions and attacks, as well as the paralysis of shipping through the Strait of Hormuz. This has driven global aluminium prices higher and boosted demand for British output.
The UK's only primary aluminium smelter, located at Fort William in Scotland, together with recycling facilities in England and Wales, has recorded increased demand. However, sector leaders warn that seizing this opportunity may remain constrained unless the government takes urgent action to lower energy costs.
Make UK, the manufacturers' organization, said industrial electricity prices in Britain were last year about 50 percent higher than in France and roughly one-third higher than in Germany. It called for the accelerated implementation of plans to cut electricity costs for energy-intensive companies by 25 percent-measures currently scheduled for launch in 2027.
Producers are also demanding mechanisms to ensure electricity price stability over defined periods, aiming to support the transition from fossil fuels to electric power and strengthen industrial competitiveness.
Aluminium is a base metal essential to numerous industries, from aircraft manufacturing to beverage cans. Around one-tenth of global output is produced in Bahrain and the United Arab Emirates, though exports from both countries have suffered in recent weeks from regional tensions.
The UK aluminium sector supports approximately 17,000 jobs and contributes nearly £2 billion annually to the economy. It also benefits from preferential US tariffs on British aluminium imports of 25 percent, compared to 50 percent on imports from other nations.