Aluminum supply disruptions push prices higher, raising cost pressures for Sabeco

Global aluminum prices are climbing toward cycle highs as supply disruptions in the Middle East tighten markets, potentially squeezing margins for downstream manufacturers including Vietnam’s largest brewer Sabeco, according to a report by Vietcap Securities.

On March 15, Aluminium Bahrain, the world’s largest standalone aluminum smelter with annual capacity of 1.6 million tons, began a phased shutdown of three production lines, cutting output by about 19%, or roughly 305,000 tons per year.

At the same time, shipping giant Maersk has suspended vessel transits through the Strait of Hormuz, rerouting ships via the Cape of Good Hope. The move has disrupted both metal exports and the flow of key raw materials across the Gulf.

The Middle East accounts for about 9% of global aluminum output, rising to 22% when excluding China. With China already operating at its self-imposed production cap, supply shocks in the region are amplifying concerns of structurally tighter markets.

Spot aluminum prices on the London Metal Exchange climbed to $3,500 per ton as of March 13, up 16.9% year-to-date and 27.5% over the past 12 months, nearing the 2022 peak of $3,800 per ton.

The combination of supply outages and logistical bottlenecks is reinforcing bullish sentiment, with limited capacity elsewhere to quickly offset lost output.

For Vietnam, which relies heavily on imported aluminum, the rally is expected to feed directly into higher input costs for manufacturers.

Vietcap said Sabeco (HoSE: SAB) could face mounting margin pressure in the second half of 2026 as its aluminum hedging contracts, which extend through mid- to -late 2026, begin to expire.

However, the brewer’s strong bargaining position with domestic can suppliers may help cushion part of the impact, allowing it to negotiate pricing or delay cost pass-through.

In 2025, Sabeco reported net revenue of VND25.89 trillion ($983.78 million) in 2025, down 19% year-on-year, with beer sales accounting for nearly 93% of total revenue. Net profit edged up 2% to about VND4.42 trillion ($168.12 million).

The company had targeted 2025 revenue of VND31.6 trillion ($1.2 billion) and net profit of VND4.84 trillion ($183.74 million), meaning it achieved about 75% of its revenue goal and over 91% of its profit target.

As of December 31, 2025, Sabeco’s total assets stood at VND32.6 trillion ($1.24 billion), with term deposits accounting for nearly 46% of the balance sheet, highlighting a relatively strong liquidity position even as cost pressures mount.

SAB shares were traded at VND43,850 ($1.67) each on Thursday afternoon.