Aluminium prices hit 4-year high as US-Iran war rattles supply
What's the story
Aluminium prices have surged by as much as 1.6% to $3,499.5 per ton on the London Metal Exchange, the highest since April 2022. The spike comes after a nearly 10% increase last week due to disruptions in shipments from the Persian Gulf caused by the ongoing conflict between US-Israel and Iran. The region contributes nearly 9% of global aluminium supply and traders are preparing for further disruptions.
Market shift
US buyers seek alternate supplies
In light of the disruptions, US buyers are scrambling to find alternate supplies from Asia. This comes after at least two major smelters in the Middle East—a Qatar-based and a Bahrain-based one—had to suspend their deliveries. The move highlights how the ongoing conflict is already affecting global aluminium trade and supply chains.
Expert opinion
Potential shift in market dynamics
Gao Yin, an analyst at Shuohe Asset Management Co., has warned that a prolonged war would further hurt aluminium supplies. She said many are buying aluminium and selling other industrial metals in the near term. This indicates a potential shift in market dynamics due to the ongoing geopolitical crisis and its impact on global supply chains for industrial metals like aluminium.
Conflict escalation
Conflict intensifies, potential for broader impact on global markets
The conflict has intensified, with Iran launching attacks on its neighbors and Israel targeting fuel depots in Tehran. The latter has also threatened to target the Islamic Republic's power grid. US President Donald Trump has warned that America would consider striking areas not previously targeted, further escalating tensions in the region and potentially affecting global markets.