Middle East Conflict: Supply Chain Concerns Trigger Metal Buying Surge Across Europe

Procurement activity in industrial raw materials accelerated sharply in Europe at the start of the week as market participants reacted to rising risks to maritime logistics between Asia and Europe. Traders across the metals supply chain reported a noticeable surge in prompt purchasing activity, with buyers attempting to secure any material that can be delivered immediately. Market participants are increasingly focused on protecting inventories amid concerns that supply chains may again face disruptions similar to those seen during the Red Sea crisis in 2024.

The shift in behaviour follows renewed security concerns in the Red Sea after Yemen’s Houthi movement signalled a resumption of attacks on vessels transiting the region. Several incidents have reportedly been recorded in recent days, although no confirmed direct hits on commercial vessels have been reported so far. Despite the limited physical damage, the threat itself has already affected shipping patterns. A growing number of carriers are avoiding the Red Sea and Suez Canal corridor, instead rerouting vessels around the Cape of Good Hope.

The rerouting significantly increases transit times between Asia and Europe and introduces uncertainty into vessel scheduling. According to trading sources, logistics providers have already begun adjusting freight rates. Forwarders have reportedly added roughly $2,000 per container to existing freight costs on routes from Asia to Europe. The increase reflects both higher fuel consumption due to the longer voyage and tightening vessel availability as ships remain tied up on extended routes.

Within the metals sector, the aluminum market has already been among the most affected. Around 8% of global aluminum exports originate from the Gulf region, with a significant share of these shipments moving through the Strait of Hormuz. Disruptions in the region are already increasing tension in the market, as Middle Eastern aluminum represents an important source of supply for global consumers, including Europe.

An additional factor is Qatar, which remains one of the key global suppliers of direct reduced iron (DRI) and hot briquetted iron (HBI). These materials are widely used as feedstock for low carbon steel production and are becoming increasingly important as the steel industry moves toward lower emission technologies. Existing disruptions to the flow of this raw material are increasing the risk of shortages in the market, as alternative sources remain limited while demand from steel producers remains firm.