Aluminium lurches to four-year high on supply fears; copper gains

LONDON: Aluminium prices surged to a four-year high on Monday after Washington said it would impose a maritime blockade of Iran, reviving fears of supply disruptions from major Gulf producers, while copper hit its highest in a month.

Benchmark three-month aluminium on the London Metal Exchange gained 3.1 percent to USD3,606 a metric ton by 1505 GMT, its highest since March 31, 2022.

The US military said it will blockade all maritime traffic entering and exiting Iranian ports and coastal areas on Monday. Tehran, meanwhile, threatened to retaliate against ports of its Gulf neighbours 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 accounts for roughly 9 percent of global aluminium supply before the US-Israeli attacks on Iran disrupted supplies and operations at several Middle East smelters, including Emirates Global Aluminium (EGA).

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 20 percent to USD80 a ton, the highest since February 2007. LME copper gained 1.5 percent to USD13,038 a ton, its highest since March 12, and nickel advanced 2.4 percent to USD17,660 after a report said that China planned to halt exports of sulphuric acid, a key input for metal refining, from May.

“This brings risks to Chile’s SxEw (solvent extraction-electrowinning) copper production, and Indonesia’s nickel output which was already facing disrupted Middle East sulphur supplies,” Morgan Stanley analyst Amy Gower said in a note.

The red metal was also supported by firmer demand in top consumer China. The Yangshan copper premium, a gauge of China’s appetite for importing the metal, jumped to USD74 a ton, the highest since June 2025 and up 76 percent in one week.

Among other metals, LME zinc slipped 0.2 percent to USD3,325 a ton, lead added 0.3 percent to USD1,927 and tin rose 0.5 percent to USD48,240.