Why India Has a Diet Coke Shortage

Everyone seems to know that Diet Coke tastes best in aluminum cans.

And that is the problem.

India’s Aluminum Cans

Because of the oil and scrap aluminum that come from the Middle East, India is running out of Diet Coke.

Oil

As the world’s second largest aluminum producer, India’s power-hungry smelters need oil. And they are not getting it. As a result, they are not making enough aluminum cans for the country’s Diet Coke.

India mostly gets its crude from Russia, Iraq, Saudi Arabia, and the UAE:

Scrap Aluminum

Meanwhile, India also imports scrap aluminum.  With the Strait of Hormuz blockaded, the bauxite that makes aluminum cannot come in and the aluminum cannot move out.

Before the Iran War began, India cut back on its scrap aluminum from the U.S. Instead, it got more from the Middle East:

Our Bottom Line: Aluminum Can Supply

The aluminum supply has been hit from all sides. Yes, raw materials cannot come in or exports leave through the Strait of Hormuz. But, making it much worse, Iranian missiles hit the smelters in Abu Dhabi (Emirates Global Aluminum) and Bahrain (Aluminum Bahrain). As a result, with the Iran War eliminating a whopping 3.2 million metric tons of aluminum production, we have our supply curve making a major move leftward. Add to all of this the U.S. tariffs, and you wind up with eye popping aluminum prices. Currently touching 4-year highs, the price is moving toward $3600 a ton.

Below, elevating price, war and tariffs shifted supply:

With aluminum one third of the cost of a can, we can expect higher prices for our Coke, Pepsi, and beer. And with its 12-month restart time for smelters that closed down, India might not see Diet Coke for a while.

My sources and more: Returning to the Strait, we began with Diet Coke. Then, for our aluminum statistics, we went here, for cans, here, and for oil facts, here, and here. And finally, at econlife, we saw that it’s not only cans but also baseball bats getting hit by disrupted aluminum markets. Do take a look.