LME aluminum premium hits $97 amid Iran supply disruptions
Aluminum is suddenly a hot commodity: thanks to supply issues caused by the ongoing conflict in Iran, the premium for near-term contracts on the London Metal Exchange (LME) has jumped to $97 per ton, its highest since 2007.
With shipments through the Strait of Hormuz restricted, the Middle East's usual 9% share of global aluminum production is taking a big hit, making it harder for manufacturers worldwide to get what they need.
LME stocks down 39% since February
LME aluminum stocks have dropped sharply, down 39% since February and now at a one-year low.
This shortage has pushed up prices by 22% this year, with Europe and the US scrambling for Canadian supplies.
Interestingly, Russian-origin aluminum still makes up most LME stocks (72%), but demand for it has fallen because of sanctions linked to the Ukraine conflict.
It's a reminder of how global politics can shake up everyday materials we rely on.