Aluminum prices surged to their highest level in almost four years as escalating hostilities in the Middle East heightened concerns about supply disruptions from the region. On the London Metal Exchange, aluminum rose as much as 1.6 per cent to $US3,499.50 a tonne, marking its highest point since April 2022. This surge follows a gain of almost 10 per cent last week, driven by the conflict’s impact on shipments from the Persian Gulf. The region accounts for approximately 9 per cent of global aluminum supply, prompting traders to anticipate further potential disruptions.
Concerns over supply have led US buyers to seek alternative sources from Asia, particularly after at least two major smelters in the Middle East, located in Qatar and Bahrain, were compelled to suspend deliveries. The escalating tensions and their potential impact on global supply chains have created apprehension within the aluminum market.
Crude oil prices also spiked, reflecting broader worries about the duration of the conflict and its potential consequences for the global economy. In contrast, copper and other industrial metals experienced declines as investors displayed risk aversion amid the market uncertainty. According to Gao Yin, an analyst at Shuohe Asset Management, a prolonged war could further harm aluminum supplies, leading to a strategy of buying aluminum while selling other industrial metals in the near term.
