Supply fears keep aluminium near four-year peak

LONDON: Aluminium rose on Tuesday, balancing near four-year highs and heading for the biggest monthly gain since 2018, due to fears of a prolonged supply squeeze after Iranian strikes damaged key Gulf smelters over the weekend.

Benchmark three-month aluminium on the London Metal Exchange rose 3.2% to $3,510 a metric ton by 1106 GMT having earlier hit $3,526, its highest since March 13. The metal is up 12% so far in March.

Iran’s attacks damaged two aluminium plants operated by Aluminium Bahrain and Emirates Global Aluminium in the Gulf region, accounting for 8% of global supply. Neither company has provided an update on their operations.

“The market is waiting for some clearer news over the extent of what’s happened,” said BNP Paribas commodities strategist David Wilson. “We haven’t had any official confirmation yet of the extent of any damage.”

Aluminium hits four-year peak after Iran attacks Middle East smelters

“It’s been a little bit of a surprise that the prices move has been relatively muted, but I guess the issue is that the wider market doesn’t really know the extent of the situation yet.”

A break above $3,546.50 from March 12 for aluminium would open the way to peaks last seen four years ago, when the markets were grappling with the immediate consequences of Russia’s invasion of Ukraine.

With aluminium stocks in the LME-registered warehouses at 416,775 tons, their lowest level since July, the aluminium market has been tight in March.

The premium for LME cash metal over the three-month contract hit $61 a ton, its highest since 2007, on Friday, signalling worries about the availability of the immediate supply. The premium was last at $50 on Tuesday.

On the ex-Gulf supply side, Indonesian state aluminium company PT Inalum on Tuesday called for the government to impose a moratorium on new alumina and aluminium plants.

Among other LME metals, copper was steady at $12,227 a ton. China’s top copper smelters decided not to issue guidance for second-quarter 2026 copper concentrate treatment and refining charges, sources with knowledge of the matter said.

LME zinc fell 0.1% to $3,178, lead remained at $1,908.50, while tin rose 0.4% to $46,500 and nickel slid 0.9% to $17,090.