Last summer, about 80 government officials and industry executives gathered in Washington to answer a key question: How would the US aluminum supply chain hold up in the event of a major global conflict?

The answer: potentially not well. That’s according to an analysis of the war simulation exercise, the details of which have not previously been reported. High-purity aluminum — an ultra-refined form used by the military for fighter jets and armored vehicles — emerged as a critical vulnerability. The metal is a niche, specialty material that accounts for a small share of the overall market but is crucial for defense and the aerospace industry.

The report noted that while China is the world’s dominant aluminum producer, the United Arab Emirates is a crucial supplier of the high-purity variety to the US. It provides about 90% of American imports of that metal, according to people with direct knowledge of the matter. Any hostilities that disrupt UAE aluminum production, then, threaten deliveries to the US. The report didn’t go into detail about how US aluminum supply would fare overall.

Seven months after the Pentagon war game, the US attacked Iran. Iranian drone strikes damaged major plants in the UAE and Bahrain in March, driving prices for the metal to a four-year high. While the UAE facility has since restarted, it will take months to return to full capacity. The closure of the Strait of Hormuz, meanwhile, has made it harder to get aluminum shipments to global buyers.

War-driven bottlenecks are amplifying concern that years of falling US aluminum production have eroded vital supply chains, putting them at risk despite the Trump administration’s tariffs and other efforts to rebuild domestic manufacturing.

The Iran war has laid bare a key weakness in the US defense industrial base: America effectively no longer makes high-purity aluminum. The nation’s sole large-scale producer shut down in 2022 because of soaring energy costs, leaving the government dependent on foreign suppliers.

That reliance on imports comes at an inopportune moment. The US military is racing to replenish high-purity aluminum stockpiles after months of war, while a global surge in defense spending is intensifying competition for the materials that underpin modern weapons production.

The attacks on Persian Gulf aluminum producers show that facilities essential to Defense Department logistics are increasingly at risk of targeted strikes, according to Bill Greenwalt, a senior fellow at the American Enterprise Institute.

“It’s a huge wake-up call for the department to be looking at supply chains in all areas around the world to ensure that they’re not especially vulnerable to attack or sabotage,” said Greenwalt, who served as Deputy Undersecretary of Defense for industrial policy during the George W. Bush administration.

Companies that sell high-purity aluminum for US military use are rushing to pin down supply as the Iran war boosts defense spending. The ultra-refined metal has exceptionally low iron and silicon content, which means it can be used to produce alloys engineered for the strength and durability that’s required for fighter jets buffeted by extreme aerodynamic forces. 

While the high-purity aluminum market is not in a true shortage, it remains tight and it’s unclear how much metal these suppliers can secure, according to people familiar with the matter.

High-purity aluminum trades about 5 to 10 cents a pound above the so-called US Midwest premium, industry consultant Greg Wittbecker said. The Midwest premium, or the surcharge added to global price benchmarks to deliver aluminum to that region, surged in June to record highs in data going back to 2003 as the Iran war roiled supply, though prices have since pared some gains.

Regular suppliers of high-purity metal include Tennessee-based Kaiser Aluminum Corp., France’s Constellium SE and Apollo Global Management’s Arconic Corp., according to one trader. The companies are the top three providers of the ultra-refined metal to defense contractors including Lockheed Martin Corp. and Boeing Co.

A spokesperson for Kaiser declined to comment. Spokespeople for the Defense Department, Constellium and Arconic didn’t immediately respond to requests for comment.

Much of the supply is likely to come from Emirates Global Aluminium PJSC. It’s the dominant supplier to the US, providing about 75,000 to 85,000 metric tons of high-purity aluminum per year for military needs, according to a person with direct knowledge of the matter. Whether the three manufacturers can obtain enough material now hinges on uninterrupted shipments from the Middle East and how fast EGA’s damaged plant can restart, they added. Aluminum stockpiles held by EGA in the US are running low, they said.

A spokesperson for EGA declined to comment.

“This is a very specific type of aluminum product that is very much business to business, so it’s not something that you can go and pick up from a distributor,” Uday Patel, senior research manager for global aluminum markets at Wood Mackenzie, said in an interview. “We’re in a situation where there is no solution. Much will depend on how much stocks are in the pipeline.”

‘Large-Scale Combat’

The Pentagon war game unfolded over two days in July of last year, according to a report from the nonprofit Institute for Defense Analyses, which oversaw the exercise.

The government officials and executives gathered were presented with a task: Increase the capacity of the US aluminum industry before and after a “major large-scale combat operation” that would curtail imports in 2027. A second event, such as a cyberattack leading to the loss of a smelter, would occur at the same time.

The participants were given cards representing actions they could take, like enforcing a “Buy American” rule, along with the estimated cost. They had to stick to specific budget scenarios ranging from $12 billion to $1 billion. Using wall charts, they wrote down their actions on sticky notes placed along a timeline.

At the end of the exercise, the participants made a series of recommendations for government agencies and policymakers. They advised amassing a domestic stockpile of high-purity aluminum and related products, as well as expanding US production of the metal and investing in new equipment. They also suggested improving access to low-cost, reliable power sources, which they said could be done by reopening old coal-fired plants or opening new nuclear reactors and natural gas generators.

The war game was part of a broader effort to identify strategic dependencies. That’s an area where Washington has made far more progress diagnosing the problem than fixing it, according to Michael O’Hanlon, the Philip H. Knight Chair in defense and strategy at the Brookings Institution, a Washington think tank.

The Pentagon frequently lacks information about subcontractors who are multiple steps removed from prime Defense Department contractors like Lockheed Martin, meaning dependencies become fully apparent only after a disruption occurs, according to O’Hanlon. Though the president can invoke the Defense Production Act — a federal law that grants emergency powers to control domestic industries — to prioritize the use of aluminum for the military, that would mean less supply for civilian consumption.

“If you start prioritizing for the military, then you’re going to deprioritize for somebody else,” O’Hanlon said.

As part of an effort led by Deputy Secretary of Defense Stephen Feinberg, the Pentagon has been working to gain better visibility into its supply chain, including for sub-tier suppliers many rungs below the primary contractors.

Treasury Secretary Scott Bessent in late June called for assessing supply-chain vulnerabilities across various industries and expanding domestic capacity to ensure the US is never at the mercy of foreign chokepoints.

The Defense Department’s war game “makes clear that America’s military readiness is inseparable from America’s industrial readiness,” Charles Johnson, chief executive officer of the Aluminum Association industry group, said in an emailed statement. 

Johnson said the Aluminum Association is urging the Senate to advance the provisions in the House-passed National Defense Authorization Act that would strengthen the US domestic aluminum supply chain. The legislation would direct the Defense Department to submit a report to Congress on the supply chain, including an analysis of opportunities to increase aluminum production in the US.

Falling Short

US policy efforts have so far fallen short, however.

In the clearest acknowledgment yet that President Donald Trump 50% tariffs on foreign aluminum haven’t boosted domestic manufacturing as intended, his administration recently unveiled an incentive program aimed at bringing aluminum smelting back to the US. The plan offers to halve duties on imports of the metal for companies building domestic plants.

Despite “the benefits from the aluminum tariff regime, the domestic production and supply of primary aluminum, which is critical to the US economy and defense industrial base, is still in insufficient supply,” according to a White House proclamation.

Trump’s tariffs have also hindered domestic stockpiling of aluminum. That’s because they’ve helped drive up US prices, forcing manufacturers to buy only what they need as costs rise.

The Pentagon’s Defense Logistics Agency has sought to procure high-purity aluminum on its own. Last year, it put out a tender seeking a contractor to provide the metal, with a stringent requirement: The material had to come from a US supplier. That’s a common provision in Defense Department contracts.

The agency later withdrew the tender without explanation. While Arconic makes the ultra-refined metal at its plant in Davenport, Iowa, the facility uses feedstock that’s partly imported. And the output is on a small scale and is only for the company’s internal consumption.

Artificial intelligence is a growing threat to US aluminum manufacturing, albeit an indirect one. Aluminum production, among the most energy-intensive industries, is struggling to compete with power-hungry data centers for cheap electricity.

Before it was shut in 2022 due to high energy costs, Century Aluminum Co.’s Hawesville, Kentucky, smelter was identified by the Commerce Department as the only high-purity aluminum producer in the US to meet military demand. Century Aluminum sold the site earlier this year to TeraWulf Inc., a company that plans to build a data center there for AI behemoth Anthropic.

The US military can still get the high-purity aluminum it needs if it’s willing to pay a higher price, according to Eugene Gholz, an associate professor of political science at the University of Notre Dame. The metal can be produced elsewhere, although at elevated cost or with delays, he said.

“If the government really wants the high-purity aluminum, they’re going to get it,” said Gholz, who served as senior adviser to the Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy from 2010 to 2012.

Still, supply-chain adjustment is neither immediate nor inexpensive. New production can take years to develop, especially in defense industries where permitting and investment are lengthy processes. That will remain a challenge for the US as it seeks to diversify its sources of high-purity aluminum and other critical materials, according to Jerry McGinn, director of the Center for the Industrial Base at the Center for Strategic and International Studies in Washington.

“These markets migrated out of the U.S. in the ’80s and ’90s because of market forces,” McGinn said. “Bringing them back is a hard thing to do.”

To contact the author of this story:

Yvonne Yue Li in New York at yli1490@bloomberg.net

breaks the traditional barrier between audience and newsroom. The show transforms

Fortune DailyFortune’s trusted reporting into actionable, conversational, and entertaining insights for an emerging class of business leaders.

Watch here.