Aluminium rises on Middle East tensions

LONDON: Aluminium prices rose on Tuesday as markets weighed potential supply tightness amid Middle East tensions and continued outflows from visible inventories.

Benchmark three-month aluminium on the London Metal Exchange gained 0.5% to $3,129 a metric ton by 1009 GMT, approaching resistance coming from the 200-day moving average at $3,161.

A ship was hit overnight in the Strait of Hormuz and Iran said there would be no more peace talks unless U.S. President Donald Trump stopped repeatedly threatening to restart the war.

In June, aluminium fell 16%, its biggest monthly decline since the 2008 global financial crisis as peace talks between Washington and Tehran fuelled optimism that Gulf supplies via Hormuz would resume.

“Aluminium is still looking oversold in the short term. But turnover is running well down on average and interest is muted following the recent risk reduction,” said Alastair Munro, senior base metals strategist at broker Marex.

Analysts still expect the global supply of the metal, used in transport, packaging and construction, to be in deficit this year, while continuing outflows from stocks in the LME-registered warehouses provide further support.

The total stocks are at 292,425 tons, the lowest since September 2022.

In other LME metals, copper fell 0.1% to $13,388.50 per ton. It has been trading in a narrow range for a week as the market is awaiting a decision by Washington on possible import tariffs on refined copper, while outflows from the LME stocks to the U.S. continue.

China’s Yangshan copper premium, which reflects buying appetite in the world’s largest consumer, rose 8% to $80 a ton, its 13-month high.

Zinc eased 0.1% to $3,586.50 after hitting its two-week high of $3,600, lead rose 0.5% to $1,889.50, tin added 0.4% to $53,105 and nickel lost 0.3% to $16,360.