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Although Iranian authorities have not formally announced any closure of the strait, multiple market participants reported that shipping activity through the waterway has effectively slowed to a near standstill amid the conflict. The Strait of Hormuz is the world’s most vital oil export route.
The front month contract price of West Texas Intermediate (WTI) crude oil soared by 7.76% to $72.19 per barrel on Monday March 2.The rise in crude oil prices may lead to higher freight costs, thereby affecting the freight rates of some non-ferrous metal raw materials. However, the overall impact on China is expected to be limited, market sources told Fastmarkets.
Exports of primary aluminium from producers close to the Strait of Hormuz have already been disrupted, with regional producers heard to have notified customers of likely delays and logistics disruptions, market sources have told Fastmarkets.“You mainly have containerized exports of aluminium from the Middle East and the bulk imports of raw materials to feed that production – it’s a unique situation and all the main container shipping lines have stopped,” one trader said.Mediterranean Shipping Company (MSC) suspended all bookings for worldwide cargo to the Middle East region until further notice, it said on Sunday March 1. On Monday, fellow shipping line Maersk suspended the acceptance of reefer [refrigerated], dangerous special cargoes “in and out of the United Arab Emirates, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia until further notice.”Maersk has also suspended new bookings between the India subcontinent (India, Pakistan, Bangladesh and Sri Lanka) and the UAE, Bahrain, Qatar, Iraq, Kuwait and Dammam and Jubail ports in Saudi Arabia.Another shipping line, Hapag-Lloyd, noted that disruptions and delays are likely, with restrictions placed on reefer cargo and intra-Middle Eastern trades. Hapag Lloyd has also applied a War Risk Surcharge (WSR) of $1,500 per TEU (twenty foot equivalent container) “to any booking issued on or after March 2, 2026, all bookings already issued but which have not yet shipped, as well as to cargo already on the water but not yet discharged or loaded to/from Iraq, Bahrain, Kuwait, Qatar, Oman, United Arab Emirates, Saudi Arabia (Dammam and Jubail).”For example if a regional player is looking to ship 20 tonnes of P1020 aluminium ingot into a twenty-foot container, this could mean an additional $75 per tonne in WSR.“Even if the regional producers were able to truck their metal to another export port, like Jeddah in Saudi Arabia, to mitigate the Hormuz impact, you would need several trucks per minute, driving for 24 hours a day – it’s impossible when you’re competing with people, food and other key materials,” a second trader said.Fastmarkets’ daily aluminium P1020A premium, in-whs dup Rotterdam was $300-340 per tonne per tonne on Monday, up sharply from $280-320 per tonne on February 27 amid supply concerns from the Middle East.
The bauxite shipping route from Guinea in West Africa to China typically rounds the Cape of Good Hope at the southern tip of Africa, avoiding the Strait of Hormuz entirely. As a result, the current US-Iran conflict is not expected to disrupt bauxite supply chains or logistics, multiple sources told Fastmarkets. However, rising crude oil prices could indirectly push freight costs higher.
Guinea is the world’s largest bauxite supplier, while China is the largest consumer. In 2025, Guinea shipped 149.19 million tonnes of bauxite to China, a 35.51% year-on-year increase, accounting for 74% of China’s total bauxite import volume, according to the latest data from China’s General Administration of Customs.
As early as last week (February 23–27), freight rates for dry bulk vessels from Guinea to China were already heard to have increased amid escalating US-Iran tensions. “I heard that freight from Guinea to China has risen to $26–27 per dmt,” one source said — an increase from $24 per dmt at the end of January.
“Due to rising crude oil prices, freight costs are expected to trend higher. If Guinean miners are unable to secure vessels at viable freight rates, shipments may be temporarily delayed,” an industry source added.
Fastmarkets assessed bauxite, cif China at $59–60 per dmt on Friday February 27 from $59–61 on February 13.
Similarly, Fastmarkets weekly assessment of bauxite, fob Guinea was at $34–38 per dmt on February 27, narrowing down from $36-38 per dmt a week earlier.
Several sources said the immediate impact for both zinc and lead concentrates market has also been an increase in freight rates.
“I understand that freight rates have indeed risen, by at least $2-3 per tonne compared to a week ago. The main driver is higher fuel costs,” a source told Fastmarkets.
“Under such conflict conditions, marine insurance premiums will inevitably increase as well,” a second source said. “Right now, no one is willing to take the risk of transiting the strait. The risk premium is clearly rising.”
Despite the logistical strain, the impact on China’s imported lead and zinc concentrate market has so far been limited, sources told Fastmarkets.
Market participants noted that many Chinese smelters remain well-stocked following earlier winter restocking, which has reduced their urgency to procure spot cargoes. As a result, buying interest in the spot market is subdued currently, cushioning the immediate effect of expected tighter Iranian flows.
Raw materials from Iran account for less than 10% of China’s total annual imports of both lead and zinc concentrates in 2025, according to Chinese customs data. This relatively small share further limits the overall market exposure to potential disruptions from the region, according to sources.
Market participants said that the impact of the conflict is likely to remain confined primarily to higher freight and insurance costs rather than triggering a broader supply shock in China’s concentrate market, unless it escalates further or results in a formal and sustained closure of the Strait of Hormuz.
Fastmarkets assessed the zinc spot concentrate TC, cif China at $10-50 per tonne on Friday, unchanged from February 13.
Fastmarkets assessed the lead spot concentrate TC, high silver, cif China at $(240)-(200) per tonne on Friday, unchanged from a month earlier.
Fastmarkets assessed the lead spot concentrate TC, low silver, cif China at $(200)-(170) per tonne on Friday, also steady month on month.
The impact of Middle East conflicts on the lithium market remained limited, as the region is not a major producer of lithium raw materials. Meanwhile, shipping fees are expected to further increase, Fastmarkets understood from sources.
“Due to the significantly rising oil prices, freight fees could rise accordingly,” a trader based in Shanghai said.
“The shipping fee has risen by $2-3 per tonne compared to a week ago,” a lithium trader told Fastmarkets on Monday, when he managed to book a vessel to deliver spodumene cargoes from South America to China.