LONDON: Aluminium rose on Tuesday as traders remained alert to supply risks from the Middle East amid the US and Israeli air war against Iran spilling into neighbouring countries.
Benchmark aluminium on the London Metal Exchange was up 2.1percent at USD3,260 a metric ton in official open-outcry trading after hitting a one-month high of USD3,315.
The Middle East accounts for 8percent of global aluminium capacity, and exports its products via the Strait of Hormuz. On Monday, Iran vowed to attack any ship trying to pass through the Strait.
Aluminium producers paused second-quarter premium offers to Japanese buyers. Norsk Hydro was seeking more information after QatarEnergy said it was stopping production of some downstream products in Qatar, including aluminium. QatarEnergy supplies gas to Qatalum, Norsk Hydro’s joint venture with a local company.
Signalling worries about the availability of the metal for nearby supply, the spread between the LME cash aluminium contract and the benchmark was last at zero in Tuesday’s volatile session compared with the last week’s discount of USD12 a ton.
Available aluminium stocks in the LME-registered warehouses fell to 375,525 tons, lowest level since September, after 45,325 tons of fresh cancellations in Malaysia’s Port Klang, daily LME data showed. Copper lost1.9percent to USD12,864in official activity after hitting USD12,722, its lowest since February 19, as the US dollar extended gains with the spike in energy prices and no end to hostilities in sight.
A selloff in stocks and government bonds deepened, while precious metals were down sharply. “It’s a new world,” said Ben Davis, head of European metals and mining research at RBC Capital Markets. “It was surprising how muted the reaction was yesterday, but markets are clearly catching up now.”
In other LME metals, tin slumped 7.7percent to USD49,550 with signsthat Myanmar’s Wa region was taking steps towards gradual restart of mining operations.
Nickel was down 0.2percent at USD17,120. Indonesia nickel miners association said the government allotted a nickel ore output quota of 260 million tons for 2026.
There will be an opportunity to propose revision on the quota, it added. Zinc fell 0.5percent to USD3,300 after hitting its one-month low of USD3,248, lead lost 0.8percent to USD1,945.5.
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