RHB Research highlighted that these developments have led to a 283% increase in stock withdrawal over two weeks, totalling 171,025 tonnes. Notably, Mercuria is reported to be withdrawing approximately 100,000 tonnes from Port Klang.

“Assuming the Strait of Hormuz-related disruptions maintain, price pullbacks are likely to be shallow, with tight spot availability keeping prices elevated,” RHB Research added, noting that spot prices have already risen in two weeks.

Given the integrated pricing structure of the industry, increases in primary aluminium and billet prices are typically transmitted downstream. As a result, manufacturers of semi-finished and finished aluminium products are likely to adjust their selling prices upwards accordingly, thereby generating greater profit.