Aluminum prices are surging. Here's how companies are handling the costs

• Ford expects commodity headwinds to exceed $2 billion—roughly double previous estimates—due largely to aluminum costs, though UBS notes the automaker has hedged its 2026 exposure
• Molson Coors reported $30 million in additional first-quarter costs from higher aluminum prices and expects further inflation in the current quarter
• UBS slashed its 2026 aluminum supply growth forecast to 0.3% from 2.4%, citing Middle East disruptions and limited European capacity expansion

Summary: Aluminum Prices Surge Amid Middle East Conflict

Key Price Movements:

Aluminum prices have surged over 13% since U.S.-Israeli strikes on Iran, reaching multi-year highs not seen since 2022. The commodity is up approximately 19% year-to-date in 2026.

Supply Disruption:

The closure of the Strait of Hormuz, a critical delivery route for Middle Eastern aluminum, is driving prices higher. According to Bernstein analyst Bob Brackett, 7% of global aluminum is sourced from the region, with military strikes removing roughly 3% of worldwide supply from the market.

Corporate Impact:

• Ford Motor: CFO Sherry House indicated commodity headwinds could exceed $2 billion—double previous estimates—largely due to aluminum costs affecting F-150 production. However, UBS analyst Joseph Spak notes Ford has hedged its aluminum exposure for 2026, calling market concerns "overblown."

• Molson Coors: Rising Midwest aluminum prices added approximately $30 million to first-quarter cost of goods sold versus the prior year, with further inflation expected in Q2.

• Keurig Dr Pepper: CFO Anthony DiSilvestro cited aluminum among products experiencing price increases, warning the company may need margin protection strategies if costs remain elevated long-term.

Market Outlook:

UBS has drastically reduced its 2026 aluminum supply growth forecast to 0.3% from 2.4%, citing Middle East disruptions and limited European capacity expansion. Additional pressure comes from rising energy costs (natural gas and coal), as aluminum production is highly energy-intensive. Analysts expect continued upward price pressure in the near term.