Aluminium steadies after Trump’s Iran war comments cool supply fears

LONDON: Aluminium steadied on Tuesday after US President Donald Trump’s pledge of a rapid conclusion to the Middle East war had eased supply concerns and triggered a round of profit taking.

Benchmark three-month aluminium on the London Metal Exchange nudged up 0.1percent at USD3,388 per metric ton in official open outcry activity.

The contract touched its highest since March 2022 at USD3,544 on Monday as fears mounted over further shutdowns of Gulf smelters, unable to ship through the Strait of Hormuz.

Trump later on Monday predicted a quick end to the conflict with Iran, prompting aluminium to shed as much as 3.5percent earlier in Tuesday’s session.

The continued premium of the cash LME contract over the three-month forward shows that fears of shortages have not gone away, however. “I’m not sure how much everyone appreciates just how hard it is to start an aluminium smelting facility once it’s being shut off,” said WisdomTree commodity strategist Nitesh Shah. “It takes a bit of time. And this is happening at a time when aluminium markets are already relatively tight.”

“I can’t see that aluminium prices should be collapsing very quickly,” Shah said, adding that a projected “wafer-thin” aluminium surplus for 2026 was now set to be a deficit.

In Asia, where spot aluminium premiums have spiked, 98,150 tons of aluminium were earmarked for delivery out of LME warehouses in Port Klang, Malaysia. The volume represents 21.7percent of all aluminium currently in the LME warehousing system.

Meanwhile, copper rose 0.5percent to USD13,020 a ton. “Any sign of easing of tension could drive a little bit more optimism around cyclical conditions. And that’s why I’d say copper is getting a lift today,” Shah said. China’s copper imports fell 16.1percent in the first two months of the year.

Zinc was the biggest gainer, climbing 1.1percent to USD3,364 due to rising power prices, while nickel firmed 0.2percent to USD17,500, lead edged down 0.2percent to USD1,932 and tin shed 0.8percent to USD50,300.