LONDON: Aluminium prices fell on Friday after Iran’s foreign minister said that passage for all commercial vessels through the Strait of Hormuz was open for the remaining period of ceasefire.
Benchmark three-month aluminium on the London Metal Exchange was down 2.6percent at USD3,549 a metric ton by 1601 GMT. The reopening of the Strait of Hormuz, where navigation has been largely suspended since US-Israeli attacks on Iran began on February 28, improves prospects for aluminium exports from the Gulf region, which typically account for around 9percent of global supply.
Producers in the region use the Strait to ship the bulk of their metal to world markets and import alumina, a raw material. There was still some caution, however, with the Norwegian Shipowners’ Association saying the presence of sea mines, Iranian conditions and practical implementation must be assessed before any transit.
“Once the dust settles we are still left with disruptions that for a shorter or longer period may keep prices elevated compared to where we came from,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Aluminium is up 18percent so far this year, having hit a four-year high of USD3,672 in the previous session amid a looming global supply deficit after one Gulf producer said in April that fully restoring production at its UAE smelters hit by an Iranian attack in late March could take up to a year.
LME copper rose 0.7percent to USD13,361.50 a ton as the dollar weakened, making dollar-priced metals more attractive for buyers using other currencies. Stocks around the world, which had already been trading around record highs, jumped further after Iran’s statement.
Among other LME metals, zinc added 0.2percent to USD3,429.50 a ton after hitting USD3,482 for its highest since January 29. Lead gained 0.6percent to USD1,963, tin rose 0.7percent to USD50,355, while nickel fell 0.9percent to USD18,060.
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