Japan's auto sector hit by aluminium shortage amid US-Iran war
What's the story
Japan's auto industry is facing a major crisis as supply cuts from the Middle East have triggered an aluminium shortage. The conflict in Iran has disrupted key shipping routes, leaving companies like Toyota Motor and Denso Corp. scrambling for alternative sources of this crucial metal. According to Japan's top auto lobby, domestic carmakers rely on the Middle East for nearly 70% of their aluminium imports.
Price hike
Aluminum prices surge by nearly 13%
The price of aluminium, a lightweight alloy used in everything from engine parts to wheels, has surged by nearly 13% since the conflict began in late February. Daiki Kato, CEO of Kato Light Metal Industry Co., warned that production of automobile parts could soon become problematic due to these disruptions. He said, "We're going to spend more selectively and conserve our energy."
Supply concerns
Japan imported around 590,000 tons of aluminium from Middle East
Japan is at the center of a potential global aluminium shortage, with the Middle East's top producer estimating it would take at least a year to return to full production. Even if peace is achieved and the vital Strait of Hormuz reopens, normal shipping levels could take months to resume. In 2025, Japan imported around 590,000 tons of aluminium from the Middle East, accounting for about 30% of its total supply.
Infrastructure impact
Conflict damages key aluminium refineries in Abu Dhabi and Bahrain
The ongoing conflict has not only disrupted shipping through the Strait of Hormuz but also damaged key aluminium refineries in Abu Dhabi and Bahrain. These facilities were attacked by Iran during its assault on regional neighbors in retaliation for US and Israeli strikes. Kato Light Metal, which imports about 400 tons of aluminium every month (200 tons each from Dubai and Australia), said it has enough inventory until May but plans to source from a Southeast Asian supplier after that.
Future challenges
Denso cuts monthly output by some 20,000 units
Toyota supplier Denso and its affiliates have cut their monthly output by some 20,000 units due to these supply constraints. The company is facing major losses as a result. Even if the war ends, supply constraints from the region could persist for months as refineries take time to come back online and shipping companies clear a backlog of hundreds of ships stuck in the Persian Gulf.
Industry response
Toyota, Nissan taking appropriate measures to mitigate impact
Most companies in Japan keep about two months of inventory for parts or raw materials. This means many could start facing disruptions by late April or early May. Toyota has not commented on aluminium or impending supply shortages but said it is monitoring the situation closely. Nissan Motor Co., meanwhile, is "taking appropriate measures, including adjustments to our production and logistics operations."