Aluminium lurches to four-year high on renewed supply fears from Iran war

LONDON: Aluminium prices jumped to their strongest in four years on Monday after Washington said it would impose a maritime blockade of Iran, reviving fears about weaker supply from top producers in the Gulf.

Benchmark three-month aluminium on the London Metal Exchange gained 1.7% to $3,558 a metric ton by 0930 GMT after touching $3,578, its highest since March 31, 2022.

The U.S. military said it will begin a blockade of all maritime traffic entering and exiting Iranian ports and coastal areas on Monday at 1000 ET (1400 GMT) after weekend peace talks failed.

“Aluminium begins the week at the centre of market attention after another sharp move higher… as traders absorb the implications of a full naval blockade around the Strait of Hormuz,” Neil Welsh, head of metals at broker Britannia Global Markets, said in a note.

The Gulf region accounted for roughly 9% of global aluminium supply before U.S.-Israeli attacks on Iran, and several smelters have been disrupted, including operations at Emirates Global Aluminium.

EGA said earlier this month that fully restoring production at its Al Taweelah smelter, which produced 1.6 million tons of cast metal in 2025, could take up to a year.

Supply worries were reflected in the premium of the LME cash contract over the three-month future, which surged 32% to $88 a ton, the highest since February 2007.

LME copper was lacklustre, adding 0.3% to $12,885 a ton as investors weighed the potential negative impact on economic growth and metals demand from higher oil prices.

“Copper is struggling to make ground as the market weighs the drag on demand from elevated energy prices and a deteriorating macro backdrop,” Welsh said.

The red metal was supported by firmer demand in top consumer China.

Yangshan copper premium, a gauge of China’s appetite for importing the metal, jumped to $74 a ton, the highest since June 2025 and up 76% in one week.

Among other metals, LME zinc dipped 0.3% to $3,323 a ton while nickel advanced 2.2% to $17,615, lead added 0.1% to $1,923 and tin was little changed at $48,000.