Middle East Conflict Hits India’s Aluminium Supply Chain

India’s aluminium recycling industry is facing significant disruption as the Middle East conflict curtails the flow of imported scrap, a key raw material for secondary producers. The country relies heavily on imports from regions including the Middle East, which accounts for nearly 30% of shipments, making the supply chain particularly vulnerable to geopolitical tensions.

Producers report operating at reduced capacity, with output cuts ranging from 20% to 40% as scrap availability tightens and prices surge by nearly 30%. Industry leaders say inventories are running low, creating a “hand-to-mouth” situation that is squeezing margins and forcing companies to scale back production.

The impact is expected to ripple through India’s auto sector, including major players like Maruti Suzuki, Tata Motors, Mahindra & Mahindra, and Hyundai Motor India, which depend heavily on recycled aluminium. Rising input costs are likely to be passed on to consumers, while industry groups are urging the government to ease import duties to stabilise supply.

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