When Iranian and Israeli missiles streak across the night sky, the electronic screens of the global metal trading market flicker. This seemingly regional military confrontation is actually disturbing the market trends of the London Metal Exchange (LME) and the Shanghai Futures Exchange thousands of miles away. In the era of globalization, war is no longer an isolated geopolitical event, but a systemic risk that affects the entire body. Iran's status as a key resource corridor and Israel's status as a high-tech materials hub make the impact of the conflict between the two countries on the metal market far beyond ordinary people's imagination. From aluminum ingots to rare earths, from cobalt mines to lithium compounds, an invisible resource war is quietly unfolding behind the smoke of gunpowder.
1. Hormuz Dilemma: The "Throat" Crisis of Energy Metals
The Strait of Hormuz, a waterway with a narrowest point of only 33 kilometers, has become the most vulnerable link in the global energy metal supply chain. About 21 million barrels of oil are shipped to all parts of the world every day, accounting for 21% of global seaborne oil transactions. More importantly, it is also an important transportation channel for cobalt concentrate, lithium compounds and rare earth intermediates. In 2023, 42% of the world's seaborne cobalt raw materials will pass through Hormuz, and these materials will eventually be converted into the battery core of electric vehicles.
The escalation of the conflict has caused the insurance rates of Strait shipping to soar by 380%, and shipping companies have begun to levy "war risk surcharges". Tesla CEO Musk warned at a recent earnings conference: "The unexpected increase in battery metal logistics costs may increase the production cost of each electric vehicle by $1,200-1,500." This statement directly triggered a collective decline in global lithium stocks. The more far-reaching impact lies in the reconstruction of trade routes-some cobalt ore transportation has begun to bypass the Cape of Good Hope, extending the transportation time from Africa to China from 35 days to 55 days, causing a structural shortage in the spot market.
In response, China Rare Earth Group has launched the "Central Asian Land Passage" emergency plan to transport some key materials through the China-Europe Express. However, the capacity of this alternative can only meet about 15% of demand, and the cost is 47% higher than sea transportation. The International Energy Agency (IEA) pointed out in its latest report that if the Strait shipping is interrupted for more than 30 days, the global battery metal supply chain will face an "unprecedented stress test".
2. The "Silicon Valley-Silicon Mine" Break of Technology Metals
Israel is an important global production base for semiconductors and medical devices. The Dead Sea region controlled by it is rich in bromine and magnesium resources. These seemingly unpopular metals are actually indispensable materials for chip manufacturing. Intel's R&D center in Haifa is responsible for 15% of its processor technology development, and the electronic-grade bromine compounds produced by local chemical company ICL account for 75% of the global market share.
The conflict caused several mining areas in southern Israel to stop production, triggering a chain reaction. Micron Technology's chief purchasing officer revealed: "The inventory of brominated flame retardants used for DRAM chip packaging is only enough to maintain production for 6 weeks." This news directly pushed up the stock prices of competitors such as Samsung and SK Hynix. Even more difficult is the shortage of magnesium raw materials-the ultra-high purity magnesium produced in Israel is a key material for manufacturing medical imaging equipment. Siemens Healthineers has announced that the delivery time of MR equipment will be extended to 9 months.
The market's reaction to this was quite dramatic: the trading volume of magnesium ingot contracts on the London Metal Exchange set a record of 800% increase in a single day, and the Chicago Mercantile Exchange's newly launched "electronic grade bromine compound" futures contract received a large number of inquiries before it was listed. Wall Street analysts called it "panic hedging", reflecting the high-tech industry's deep anxiety about supply chain disruptions.
3. The undercurrent of resource nationalism
Military conflicts have accelerated the redivision of the global resource map. Indonesia suddenly announced that it would increase the export tariff on nickel ore from 20% to 35% on the grounds of "geopolitical risk premium". The Guinean military government took the opportunity to ask international mining companies to renegotiate the bauxite sharing agreement. This domino effect is changing the pricing logic of the metal market - the traditional supply and demand model can no longer explain the recent abnormal phenomenon of palladium prices and car sales deviating by 30%.
As the world's largest metal consumer, China's strategic reserve policy has further exacerbated market volatility. The State Administration of Grain and Material Reserves recently secretly purchased about 80,000 tons of electrolytic copper, equivalent to two weeks of global consumption. The U.S. Department of Energy has activated the "Defense Production Act" authorization, forcing domestic lithium mining companies to give priority to supplying military contractors. This competition among major countries for resources has spawned a new market form: LME's copper inventory has fallen to the lowest level since 1997, but the copper inventory in Shanghai Free Trade Zone has broken a record high.
Morgan Stanley metal analysts pointed out: "We are witnessing the most profound reorganization of the resource order since the collapse of the Bretton Woods system." In this context, traditional hedging strategies have failed, and the Goldman Sachs Commodity Index shows that the volatility of the metal market in Q2 2024 has reached its peak since the 2008 financial crisis.
4. The "Metal Paradox" of Green Transformation
The conflict exposes the resource weakness of the clean energy revolution. Each 3MW wind turbine requires about 4.7 tons of rare earth permanent magnet materials, and 60% of the world's neodymium iron boron permanent magnet raw materials need to be transported through the Middle East. Siemens Gamesa's latest warning said that its wind turbine delivery may be postponed due to delayed neodymium supply. Even more serious is the aluminum frame crisis facing the photovoltaic industry - the Middle East's primary aluminum production capacity accounts for 12% of the world's total, and the war has caused the European low-carbon aluminum premium to soar to $380 per ton.
This contradiction has spawned explosive investment in alternative technologies. Tesla announced that it will test rare earth-free motor technology in its Nevada factory, while Chinese photovoltaic company Longi Green Energy has accelerated the promotion of frameless double-glass modules. Bloomberg New Energy Finance pointed out: "Geopolitical conflicts are reshaping the technology roadmap, and 2024 may become a turning point for the commercialization of rare earth-free technology."
But transformation takes time. In the short term, the International Renewable Energy Agency predicts that the cost of solar projects may increase by 5-8% due to rising aluminum prices, which will directly affect at least 23GW of planned projects worldwide. The turmoil in the metal market has unexpectedly promoted the nuclear power revival - uranium prices have risen 62% in the past three months, becoming the best performing commodity.
The military confrontation between Iran and Israel is essentially a multi-dimensional war for resource control. When drones and missiles clash, another form of competition is unfolding in futures markets, mining rights negotiations and technology laboratories. Metal price fluctuations are just the surface ripples of this deep change.
