Toyota and Parts Manufacturers Hit Directly: Japan's Aluminum Procurement Weakness Exposed by Middle East Dependence

For Japan's manufacturing industry, the current Iran war is not just a distant regional conflict. Rather, the aluminum shortage is hitting the factory floors the fastest and hardest. The supply of lightweight metals, widely used in automobiles, parts, building materials, and packaging, is faltering, forcing Japanese companies to simultaneously adjust production and seek alternative procurement. While news of rising crude oil prices is more noticeable, the reality is that we are entering a more troublesome phase where "the materials themselves are not coming in."

The reason Japan is particularly vulnerable lies in its procurement structure. According to Bloomberg reports, domestic automakers rely on the Middle East for about 70% of their aluminum imports, and as of 2025, Japan as a whole received about 590,000 tons, or about 30% of its total supply, from the Middle East. Moreover, since the end of February when the conflict intensified, aluminum prices have risen by about 13%. The premium paid by Japanese buyers for the April-June quarter jumped to $350-$353 per ton, reaching an 11-year high. Since Japan also plays a role in setting the benchmark price for Asia, the domestic pain easily translates into cost increases for the entire region.

Why has the situation become so strained? The background includes not only logistical disruptions around the Strait of Hormuz but also direct impacts on the smelting and refining centers in the Middle East. Reuters reports that the Middle East accounts for about 9% of the world's aluminum smelting capacity, and the shutdown of facilities in Bahrain and Qatar, along with damage to a large smelter in Abu Dhabi, has rapidly amplified supply concerns. Some facilities may take nearly a year to recover, even if a ceasefire is reached. Thus, the issue is not simply resolved by "ships passing through"; it has become a structural shock requiring a long time to rebuild the supply chain itself.

The impact is already reflected in numbers. According to a Bloomberg article reprinted by Business Times, Kato Light Metal Industries in Aichi Prefecture has halted shipments from the Middle East and is considering sourcing from Southeast Asia while managing with existing inventory. Many Japanese companies hold only about two months' worth of raw materials and parts, so disruptions beginning from late April to May are not surprising. For Denso, a Toyota affiliate, and its related companies, a production cut of about 20,000 units per month occurred by late March, and Toyota itself reported a production reduction of about 40,000 vehicles for the Middle East market. If this is the situation for large companies, smaller processing firms and extrusion manufacturers are even more strained.

What cannot be overlooked is that the aluminum shortage does not end in isolation. Another Reuters report highlights Japan's high dependency on Middle Eastern crude oil, with rising costs in the chemical, logistics, and materials sectors cooling corporate sentiment. In the April Reuters Tankan survey, manufacturing business sentiment saw its largest decline in over three years, with further deterioration expected. The aluminum shortage could extend beyond automotive parts to affect can materials, building materials, electronic devices, and packaging. Initially, it may be a situation of "expensive but available," but if prolonged, it could turn into a scenario where "the desired specifications of materials are unavailable," leading to increased factory shutdowns and delivery delays.

Meanwhile, the market is already exploring the next steps. Reuters reports that Russia's Rusal is redirecting some of its supply intended for China to Japan and other Asian markets. However, the more alternative procurement progresses, the more issues like quality standards, transportation times, contract conditions, and geopolitical risks emerge. Simply changing suppliers does not solve the problem, as aluminum is not that straightforward. In the automotive and precision parts sectors, specifications are strict for each application, and merely filling the quantity is not enough. The challenge Japanese companies now face is not just price surges but also the issue of whether they can stably secure compatible materials, which is a matter of supply quality.

Looking at reactions on social media, it is clear that this crisis is being perceived quite concretely. The most noticeable concern is from an industry perspective, warning that "we are entering a phase of physical shortages, not just price increases." Accounts following the aluminum market have noted the rise in LME prices, the progression of backwardation, and the high dependency on the Middle East, spreading the view that the supply shock will not be transient. Additionally, posts focusing on risk analysis emphasize the high dependency of Japan on the Middle East and the prolonged recovery delays of smelters as long-term risks.

Another significant concern is from the consumer perspective. On X, there is a widespread view that "price increases and supply reductions could spread to cans, packaging materials, building materials, and automotive parts," with notable reactions like "Will this bounce back to everyday product prices again?" In reality, aluminum has a wide range of applications, from beverage cans and snack bags to housing materials, home appliances, and vehicle parts. While social media voices are not necessarily statistically representative, it is important that the material shortage is beginning to be understood as a "living cost" issue. Price revisions in business-to-business transactions are less visible, but consumers ultimately perceive changes as product price increases or difficulties in obtaining products.

The crisis has highlighted the reality that Japan's manufacturing industry is deeply connected to the Middle East not only for energy but also for materials. Amid trends like decarbonization, EVs, lightweighting, and logistics efficiency, the importance of aluminum is rather increasing. Therefore, it should not be dismissed as mere market volatility. Even if short-term solutions like inventory and alternative procurement can be managed, if the same pattern repeats, it will necessitate a reevaluation of procurement diversification, the sophistication of domestic recycling, and the overall preparation for critical materials. The true lesson the Iran war has brought to Japan is that resource crises do not occur only with crude oil. If aluminum stops, the manufacturing nation stops as well. This reality is now quietly becoming apparent.

Source URL

https://financialpost.com/pmn/business-pmn/japan-manufacturers-hurt-most-by-aluminum-shortage-from-iran-war

・Bloomberg main article (direct impact on Japan's manufacturing industry, especially around Toyota and Denso, price increases, and overall dependency on the Middle East)
https://www.bloomberg.com/news/articles/2026-04-19/japan-manufacturers-hurt-most-by-aluminum-shortage-from-iran-war

・Business Times reprint article (confirmation of main content from Bloomberg article: 590,000 tons, about 30% of total supply, approximately two months of inventory, actions by Kato Light Metal and Denso)
https://www.businesstimes.com.sg/companies-markets/japan-manufacturers-hurt-most-aluminium-shortage-iran-war

・Reuters (Japan's aluminum premium reaching an 11-year high in the April-June quarter due to Middle East supply fears)
https://www.reuters.com/world/asia-pacific/japan-q2-aluminium-premiums-hit-11-year-high-mideast-supply-fears-2026-03-26/

・Reuters (overview of global aluminum supply chain disruptions due to the Iran war, with potential long-term Middle East supply issues)
https://www.reuters.com/markets/commodities/iran-war-rattles-global-aluminium-supply-chain-2026-03-19/

・Reuters (report on the aluminum market entering a "crisis," with potential long recovery times for large smelters in the UAE)
https://www.reuters.com/markets/commodities/aluminium-crisis-war-tariffs-market-running-empty-2026-04-16/

・Reuters (article highlighting concerns about major aluminum production sites in the Middle East being affected by Iran's attacks, with the region accounting for about 9% of global supply capacity)
https://www.reuters.com/world/middle-east/irans-strikes-major-gulf-producers-intensify-aluminium-supply-fears-2026-03-30/

・Reuters (Rusal's move to redirect some aluminum intended for China to Japan and other Asian markets)
https://www.reuters.com/world/china/rusal-plans-reroute-aluminium-china-japan-iran-conflict-reshapes-trade-sources-2026-04-08/

・Reuters (report on Toyota considering and implementing a production cut of nearly 40,000 vehicles for the Middle East market)
https://www.reuters.com/world/asia-pacific/toyota-motor-cut-output-middle-east-by-nearly-40000-vehicles-nikkei-reports-2026-03-05/

・Reuters (report on Japan's manufacturing business sentiment experiencing its largest decline in over three years due to Middle East concerns)
https://www.reuters.com/world/asia-pacific/japan-manufacturers-confidence-dips-most-three-years-middle-east-concerns-2026-04-14/

・X / Bloomberg official post (confirmation of the topic spreading on social media)
https://x.com/business/status/2045982035437597175

・X / AluminiumMania (industry perspective showing concern shifting from price surges to physical shortages)
https://x.com/AluminiumMania/status/2032811406291096039

・X / Post by Naohiro Niimura (mentioning long-term risks considering the Strait of Hormuz and delays in smelter recovery)
https://x.com/nniimurarisk/status/2046035030150184961