On March 28, 2026, Iranian missile and drone strikes hit Emirates Global Aluminium (EGA) in Abu Dhabi and Aluminium Bahrain (Alba), two of the largest aluminum smelters globally. Together, these facilities produce over 3.2 million metric tons of aluminum per year. For context, the entire United States produced just 660,000 tons of primary aluminum in 2025.
This escalation fundamentally changes the nature of the aluminum supply disruption. Before the strikes, the closure of the Strait of Hormuz blocking metal exports and raw material imports from the Gulf was primary impact pushing costs higher. Now, with physical smelter infrastructure damaged and Gulf producers invoking force majeure, the disruption has shifted from shipping delays to direct production capacity loss.
The Arabian Gulf holds roughly 10% of global aluminum smelting capacity. An estimated 2–3% of global production is now offline under force majeure, representing approximately 800,000-900,000 metric tons of lost output in 2026. Qatar's Qatalum has reduced production by about 40% and Alba had already announced a 19% capacity shutdown before the strikes hit.
Even if the conflict ended tomorrow, restarting aluminum smelting capacity is not a switch that can be flipped back on. Aluminum smelting is one of the most energy-intensive industrial processes in the world. When a potline loses power or goes cold, the molten aluminum and electrolyte inside the cells solidify. That solidified metal must be physically broken out of the cells before they can be rebuilt, re-energized, and brought back to operating temperature.
EGA predicts a full smelter restart to take 12 months. Rushing the process leads to cascading equipment failures and shortened cathode life, making restarts even more costly. This timeline means the production gap created by these strikes will persist well into 2027 regardless of how the geopolitical situation evolves.
Aluminum accounts for roughly one-third of aluminum can cost. When global aluminum prices rise, that increase flows directly into the price of every can and lid you purchase. The smelter strikes are adding upward pressure on top of an already stressed supply chain: tariffs, low US inventory, and growing global demand were already driving prices to multi-year highs before the first missile hit.
There has been significant media coverage and speculation about potential changes to aluminum tariffs, including reports from the Wall Street Journal and Financial Post suggesting the White House was weighing a Section 232 aluminum tariff cut. The administration has since publicly contradicted those reports, and no executive order has been signed to revoke Section 232. The only truth craft beverage can bet on current state is that the Section 232 tariff on aluminum imports remains at 50%.
The section 232 tariff was not touched by the Supreme Court's February 20 ruling struk down IEEPA-based "fentanyl" and "Liberation Day" tariffs. Section 232 is a separate legal authority the court ruling does not apply to.
The new Section 122 tariff (10–15%) issued on February 20 does not stack on top of Section 232 goods. Aluminum is explicitly exempted. So for aluminum cans and lids, the net tariff position has not changed.
Operators should plan on the 50% tariff staying in place. Any reductions or changes are an upside, but budgeting for a reduction that may never come is a margin risk businesses don't need to take. The 50% tariff is the single largest driver of the elevated US Midwest Premium, which directly impacts the price of every aluminum can produced or sold in North America.
The combined price of raw aluminum in the United States is made up of two components: the LME (London Metal Exchange) global base price and the US Midwest Premium (MWP), which covers North American transport, storage, tariff pass-through, and regional supply-demand dynamics. Both are moving sharply higher.
The LME surged 6% on March 30, 2026 to $3,492 per metric ton, near a four-year high. The jump was a direct response to the smelter strikes, but prices were already elevated due to China approaching its self-imposed 45 million metric ton production cap (60% of global supply), strong demand from EVs, solar, and AI infrastructure, and investor inflows into commodities.
The MWP has been setting record highs since November 2025, running well above the level implied by tariffs alone. Low US inventory is the primary driver: importers are holding metal in warehouses outside the country to avoid 50% tariffs in case of further policy changes, which constrains domestic supply and pushes premiums higher.
The all-in US aluminum price (LME + MWP) surpassed $2.70/lb at the beginning of April. The 15-year average aluminum price is $1.15/lb.
To help craft beverage businesses think through their own pricing decisions, Cask analyzed public earnings filings from 10 major beverage companies in Q1 2026. The pattern at the macro level is clear: brands with pricing power are raising prices. Brands that absorb costs without action are paying for it.
AB InBev bought back a 49.9% stake in its own can manufacturing plants and now produces 98% of its US cans domestically, giving it the lowest structural aluminum cost exposure in the industry. Vertical integration is a lever reserved for the macros.
LaCroix (FIZZ) pushed an approximately 6% price/mix increase and volume held flat - arguably the strongest proof point in canned beverages that modest price increases don't kill demand. For craft beverage operators looking for evidence to justify their own pricing moves, this is the data point that matters most.
PepsiCo raised wholesale prices 3–5%, though North American beverage volumes dipped 3% on consumer pushback. Constellation Brands is managing dual tariff risk from both aluminum cans and Mexican imports while holding 38% beer margins through selective pricing.
Molson Coors chose to absorb a $125 million aluminum headwind in 2026 and is guiding earnings per share down 11–15% as a result. The company's CEO described the MWP increase as a cost pressure where "there are not immediate actions you can take." Molson Coors is the clearest example of what happens when cost absorption replaces pricing action. Absorption is a losing strategy at any scale.
Monster Beverage implemented a frontline price increase in November 2025 and maintained 55.7% gross margins, absorbing the tariff drag without cutting guidance.
The companies with the most sophisticated pricing and consumer research teams in the industry are all raising prices and using industry-wide aluminum cost pressure as the justification. If LaCroix can raise 6% with flat volume, craft beverage brands with loyal local followings have room to move. The market is giving craft beverage the cover needed to adjust pricing.
Cask synthesized insights from over 500 conversations with craft beverage operators across the United States and Canada. The dominant pattern: most operators are waiting. The prevailing response is absorb now, hope costs ease, raise later. Fear of losing a retail account is overriding the financial case for action.
But majority of operators who have raised prices report that demand held. For others, velocity slowed slightly and margins recovered. The fear of customer loss is real, but it is not supported by data.
A regional craft brewery in (2M cans/year) is planning three price increases in 2026: 3% in April and 3% in September. This is the most aggressive pricing stance Cask is seeing at the micro level.
A growth-stage functional beverage brand in the US (3M cans/month target) is raising prices ahead of their volume ramp and moved to monthly aluminum pricing to shrink their cost exposure window.
A mid-size US co-packer / RTD brand is locked into retail pricing under a contract that only triggers cost pass-through at a 5%+ cost delta. They are absorbing losses with no relief until Q2 at the earliest.
A Midwest regional co-packer is absorbing $64,000 in direct tariff losses this year and delaying any price increase. Fear of retail pushback is outweighing the financial math.
An established DTC craft brewer is only raising taproom pint prices and underpricing packaged goods to protect brand accessibility at the expense of margin on every can sold.
Data vs. instinct: Large brands raise prices based on elasticity models and consumer research. Most craft operators delay based on gut feel. The fear of losing a customer is real, but it's not evidence.
Hedging vs. full exposure: Major brands hedge aluminum costs 6-12 months out. Smaller operators are fully spot-exposed with no hedge. Every month of delay is a month of unprotected cost exposure.
Structural levers vs. none: AB InBev controls its own can supply. Small craft beverage brands have no equivalent escape valve. Pricing is the only lever available and the operators who are using it are recovering margin while demand holds.
Supply disruptions are structural. Tariffs are holding. Global demand continues to climb. There is no projected short-term relief for aluminum prices. Here's what craft beverage businesses should be doing right now.
LaCroix held volume at a 6% price/mix increase. PepsiCo raised wholesale 3–5%. The entire beverage category is moving and that movement is craft operator's market justification to retail partners. Every week businesses delay establishing pricing adjustment strategies is a week of margin they won't recover.
Co-pack and annual agreements locked at pre-tariff pricing are the single biggest margin leak we're seeing across 500+ operator conversations. If contracts don't include a cost pass-through clause, operators should add one at renewal. Operators without escalator language are absorbing $40,000 to $64,000+ in direct losses with no relief until their agreement resets.
Premium formats, higher-margin SKUs, and format extensions that support a higher price point protect the P&L without a blunt across-the-board increase. This is the playbook Molson Coors, Keurig Dr Pepper, and Monster are all running right now. Premiumization gives businesses pricing room that a base-level price hike alone does not.
When aluminum markets are tight and raw material costs continue to climb, working with a supplier grounded in domestic production and deep distribution experience can meaningfully improve supply stability, lead time confidence, and pricing visibility.
Cask Global Canning Solutions is a 25+ year Distribution Partner of Ball Corporation. We supply aluminum cans and lids to craft beverage businesses in the United States, Canada, and the United Kingdom, with dedicated account management, quarterly planning, and the kind of proactive supply chain support that helps businesses capture real cost savings.
Our team is here to help build a smarter supply program for your business.