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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
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Sign InNick Snowdon, commodities analyst at Geneva-based Mercuria, told Reuters that the current aluminum supply shock is the largest single shock a base metals market has suffered in the post-2000 era. These warnings come as geopolitical tensions in the Gulf, which accounts for 9% of global production, lead to the blockage of the Strait of Hormuz and force majeure declarations by major smelters. This disruption could result in a 2 million-ton deficit by year-end, prompting Mercuria to strategically acquire a 25% stake in an Indonesian aluminum plant to secure its supply chain. Major financial institutions including Goldman Sachs and JPMorgan have echoed these concerns regarding the severe supply shortage. This shift marks Mercuria's transition from market analyst to producer amid global volatility. Experts believe this event could fundamentally reshape the dynamics of global commodity trading in the near term.