Aluminum prices hit their highest level in nearly four years as escalating hostilities in the Middle East fueled fears of supply disruptions from the region. On the London Metal Exchange, aluminum rose 1.6 percent to $3,499.50 a tonne, its highest level since April 2022. The increase followed a nearly 10 percent rise last week, due to the impact of the conflict on shipments from the Persian Gulf. The region accounts for about 9 percent of global aluminum supply, giving traders a sense of further potential disruptions.
Supply concerns have forced U.S. buyers to seek alternative sources from Asia, particularly in the Middle East, forcing at least two major smelters, located in Qatar and Bahrain, to suspend shipments. Rising tensions and their potential impact on global supply chains have created concerns in the aluminum market.
Crude oil prices also rose, reflecting broader concerns about the duration of the conflict and its potential consequences for the global economy. In contrast, copper and other industrial metals declined as investors showed risk aversion amid market uncertainty. A protracted war could further damage aluminum supplies, leading to a strategy of buying aluminum while selling other industrial metals in the near term, according to Gao Yin, an analyst at Shuohe Asset Management.
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