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For true Diet Coke fans, the soda is a sacrament, and honor comes with strict criteria. The spring edition released by McDonald’s is thought to represent the pinnacle of form, but given the choice between plastic, glass, and metal containers, conventional wisdom suggests that Diet Coke tastes better in aluminum cans.
In recent weeks, the cans have reportedly disappeared from shelves across India. Because the country’s Diet Coke only comes in aluminum form, Reuters detailsis at the mercy of ongoing supply issues stemming from the war in Iran. The Middle East has the capacity to produce 7 million tons of aluminum annually (75 percent of which is exported). That is 9 percent of the world’s production capacity. And since the fighting began in late February, prices have continued to rise around the world. Base price per ton of aluminum exceeded $3,600 in April, a four-year high. This metal appears everywhere in everyday life: solar panels, MacBooks, airplane fuselages, deodorant, over-the-counter heartburn pills, grocery store cold brew cans. We have nowhere near a severe shortage in the United States, but around the world, price crises have already arrived.
The Middle East’s access to cheap and abundant energy is part of what has made it the center of global aluminum production over the past few decades. Aluminum is derived from a red mineral called bauxite. The process of refining and melting substances requires a large amount of energy, so equipment is usually located where it makes financial sense to do so. When Iran began blocking shipping through the Strait of Hormuz, Gulf installations he struggled importing raw materials and exporting pure aluminum. Equipment in Qatar and Bahrain reacted to the uncertainty by turning off the solvents. Then, on March 28, Iran’s Islamic Revolutionary Guard Corps launched a drone and missile attack attack on two aluminum devices in the region; the Al Taweelah plant in Abu Dhabi, which was responsible for producing 1.6 million tonnes of steel last year, has since been completely closed. The strikes led to a near standstill 3.2 million tons of the world’s aluminum—and the economic problems, like India’s, that stem from that supply.
In the United States, iron is more expensive than in other parts of the world – ironically, thanks to one of the famous Diet Cokes. who enjoy on the planet. Donald Trump raised tariffs on aluminum imports last year, which ended up increasing regional price of steel and pushed away some of the Canadian metals that American buyers depended on. Therefore, more aluminum from the United Arab Emirates and Bahrain began flowing to the U.S. Now the U.S. faces higher aluminum prices than anywhere else, and may be more affected by price shocks coming from the Gulf.
The US imports more aluminum than it produces, but even as prices rise, the shortage has not fully hit the US. America “has some buffers: inventory, contract supply, secondary aluminum and steel that’s already in the pipeline,” Paul Adkins, managing director of aluminum consulting firm AZ Global, told me. Americans can still get access to steel if they’re willing to pay more, at least for now. At the same time, Asian economies, which tend to rely more on goods from the Gulf, have already had to deal with shortages. In Vietnamthe shortage of fertilizers and oil punishes rice farmers and enters the world’s food supply; in Japancompanies are worried about the lack of naphtha, a chemical used to make all kinds of synthetic materials; in Taiwansemiconductor manufacturers can’t get the helium they need.
India relies heavily on the Middle East for its aluminum scrap, and industries across the continent are reportedly shrinking. The country is the world’s second largest producer of aluminum – it produces more metric tonnes than the UAE or Bahrain – but the war in Iran has made strengthening the industry more expensive, and companies decrease in production. Also, like the US, the Iran war may only be adding to an already existing problem: Last year, the Indian Bureau of Standards tightened aluminum regulations, which is reported decreased the supply of usable metal.
Globally, the problem may get worse before it gets better. If the war in Iran were to end today, the aluminum smelters of the Middle East would not immediately come back online; power-hungry reactors take time to heat up. It’s a little like “if you have a big house and there’s electricity,” Jean Simard, president and CEO of the Canadian Aluminum Association, told me. “Normally, you have to unplug all of your equipment to avoid surges when the power comes back on. It’s exactly the same situation as a vacuum cleaner, except that you’re talking about high power.” (Oil wells are similar challenge.)
Most people are not looking to buy industrial aluminum quantities. But longer aluminum price stay up, likelier it becomes that companies start to pass their costs. The economic crisis of the war in Iran is measured by more than just oil.
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Today’s news
- Yesterday a federal judge released an alleged suicide note from Jeffrey Epstein which had been hidden for years as part of his ex-partner’s criminal case. The message, which the inmate said he received in 2019, has not been verified.
- US Secretary of State Marco Rubio met Pope Leo XIV in the Vaticanwhere they discussed “the situation in the Middle East and topics of mutual interest in the Western Hemisphere,” according to the State Department.
- In a hearing today, a federal appeals court appeared to doubt that the Trump administration and Defense Secretary Pete Hegseth he can punish Senator Mark Kelly for his remarks calling for the military to refuse illegal orders.. The justices questioned whether the move violated his First Amendment rights.
Evening Read
The ‘Disco Sucks’ Future of Music Is Near
By Spencer Kornhaber
You scroll through TikTok, Instagram, or one of the many other apps where short-form video consumes your time (perhaps the app you’re using. order sushi) You meet a stranger doing something interesting while a song plays in the background. A few swipes later, you’ll hear the song again. Now it’s in your head. Now it seems like an interesting part of the zeitgeist. You save a song on your phone.
A question arises in your mind: Did you just discover new music, or, through the evil art of algorithmic manipulation, did the music industry convince a new customer?
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Investigate. What are Savannah Bananas? save Black baseball? Josh Levin writes about their latest attempt to bring back a Negro Leagues team.
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Rafaela Jinich contributed to this journal.
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