LONDON: Aluminium prices hit a four-year high on Thursday as traders continued to assess the scale of damage to global supply from the US-Israeli war on Iran, while hopes of a possible peace deal lent support to other base metals.
Benchmark three-month aluminium on the London Metal Exchange rose 0.6 percent to USD3,643 a metric ton by 1600 GMT after hitting USD3,672, its highest level since March 24, 2022.
Its record high of USD4,073.5 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.
“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 up 0.2 percent at USD13,277 a ton, zinc rose 0.8 percent to USD3,424, lead fell 0.6 percent to USD1,953.50, tin gained 1.3 percent to USD50,215 and nickel climbed 1.0 percent to USD18,305.
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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