New factory data shows Hormuz disruption fueling global supply crunch

Canada's manufacturing PMI edged up to 53.0 in June, but supplier delivery times hit their worst since September 2022 due to Middle East shipping disruptions, according to Reuters.reuters
The U.K. manufacturing output sub-index reached a 21-month high as firms stockpiled ahead of price hikes, even as the headline PMI slipped to 52.5.reuters
Despite the strait's formal reopening on June 15, mines and renewed strikes have kept traffic well below normal, with analysts warning full recovery could stretch into 2027.telegraph+1

The Strait of Hormuz has formally reopened to commercial shipping following the U.S.-Iran memorandum of understanding signed in mid-June, but supply chain experts and new manufacturing data released this week reveal that the economic damage from four months of disruption will take far longer to unwind than the diplomatic breakthrough might suggest.

Fragile Passage, Lingering Risks

President Donald Trump declared on June 15 that "ships are starting to move, many loaded up with oil, out of the Strait of Hormuz," describing a southern shipping lane through Omani waters as "totally safe, secure, and pristine." But the reopening has been anything but smooth. Attacks between U.S. and Iranian forces in late June forced traffic through the strait to drop sharply, with only 22 vessels transiting on one day late last month, down from 38 the day before, according to maritime data firm Kpler. The International Maritime Organization managed to evacuate roughly 115 of the estimated 600 vessels stranded in the Gulf before halting operations amid renewed strikes.aljazeera+2

The Telegraph reported that the central section of the strait remains mined and impassable, with only inshore traffic zones near Oman and Iran reportedly free of mines. Industry body Bimco has advised ship owners to hold off on transits, and analysts estimate it will take weeks merely to clear the vessel backlog, let alone restore normal operations.telegraph

Manufacturing Data Shows War's Ripple Effects

Fresh PMI data released this week illustrates the conflict's continuing toll on global manufacturing. In the United Kingdom, factory output expanded at its fastest pace since September 2024, as clients engaged in strategic stockpiling ahead of anticipated price rises linked to Middle East disruptions, according to S&P Global data published on Wednesday. The headline UK Manufacturing PMI fell to 52.5 in June from May's 53.9, but the output sub-index reached a 21-month high as firms rushed to build inventories.reuters+2

In Canada, Reuters Thomson Reuters Corporation reported on Thursday that the manufacturing PMI edged up to 53.0 in June, with suppliers' delivery times lengthening to their greatest extent since September 2022 due to war-linked shipping disruptions. Input cost inflation climbed to a near four-year high as freight costs and raw material prices surged.reuters

Metal Markets and Industrial Costs

The conflict's impact on metals has been acute. Iran suspended steel slab and sheet exports in late April, sending shockwaves through construction, automotive, and infrastructure sectors across Asia. Aluminium futures on the London Metal Exchange surged more than 10% since the war began, with prices reaching a four-year high above $3,500 per ton. Regional aluminium premiums in Europe and Japan rose roughly 70% from pre-war levels, according to CME Group .reuters+4

The HVAC industry has been particularly exposed, with manufacturing inputs including copper, aluminium, and components all climbing amid the disruption. Patrick De Haan, a petroleum analyst at GasBuddy, told CBS News it could take "until potentially mid-to-late 2027" for prices to fully normalize.asiatimes+1

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