Aluminium hits four-year high on Middle East supply worries
- Benchmark three-month aluminium on the London Metal Exchange rose 0.4% to $3,636 a metric ton
LONDON: Aluminium prices hit a four-year high on Thursday as traders continued to assess the scale of damage to global supply from the U.S.-Israeli war with Iran, while hopes of a possible peace deal lent support to other base metals.
Benchmark three-month aluminium on the London Metal Exchange rose 0.4% to $3,636 a metric ton in official open-outcry trading after hitting $3,672, its highest level since March 24, 2022.
Its record high of $4,073.5 was on March 7, 2022, when markets were grappling with the immediate fallout of Russia’s invasion of Ukraine.
The global aluminium market is facing a supply deficit this year due to the Iran war, with one Gulf producer saying in early April that fully restoring production at one of its UAE smelters hit by an Iranian attack in late March could take up to a year.
The LME’s index of six base metals contracts closed at a record high on Wednesday amid strong prices for the entire complex, with copper and tin hitting their highest levels since early March the same day.
Copper hits six-week high on hopes of fresh US-Iran peace talks
“Between hopes of some sort of Gulf settlement as well as production uncertainty and stress, metals have performed admirably in April thus far,” said Alastair Munro, senior base metals strategist at broker Marex, adding that investment from the wider financial system had driven recent gains.
Despite elevated prices for the entire LME basket, signs of tightness for near-term delivery are visible only in aluminium, with the LME cash contract trading at a premium over the three-month benchmark.
The same spread for other metals is at a discount.
LME copper was down 0.1% at $13,235 a ton in official activity, zinc rose 0.8% to $3,424, lead fell 0.8% to $1,950, tin gained 0.6% to $49,900 and nickel climbed 0.7% to $18,260.
Earlier in the session, zinc rose to its highest level since February 12, lead climbed to its strongest since March 3, and nickel reached a near three-month peak for a second straight day.
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