Aluminum prices rose on Monday amid reports of Iranian attacks on facilities belonging to the largest Middle Eastern metal producers.
Three-month aluminum futures on the London Metal Exchange (LME) were trading at $3,432.5 per ton as of 11:10 a.m. local time, up 4.1% from the previous session’s close. Earlier in the session, the price rose to $3,492 per ton, its highest level since March 19, approaching a four-year high of $3,546.5 per ton.
Aluminum contracts, the most actively traded on the Shanghai Futures Exchange, rose 3.43% to 24,725 yuan ($3,578.82) per ton at Monday’s market close.
Last Sunday, Aluminium Bahrain (Alba), which operates one of the world’s largest aluminum plants, said it was assessing the damage from Saturday’s Iranian strikes on its facility. In addition, leading Middle Eastern aluminum producer Emirates Global Aluminium reported “significant damage” to production facilities as a result of Iranian missile and drone attacks on the Khalifa economic zone in Abu Dhabi.
Concerns about disruptions to aluminum supplies to the global market arose with the start of the U.S. and Israeli war against Iran. Producers from the Persian Gulf countries, which account for about 9% of global supply, have lost the ability to ship metal through the Strait of Hormuz. Under these conditions, Alba has already begun cutting back production, and damage to its facility could worsen the situation, experts note.
“Attacks on facilities increase the likelihood of prolonged supply disruptions,” states a report by ING Economics analysts. “Supply issues may persist even if geopolitical tensions ease, heightening the risk of rising prices.”
For a more detailed overview of global aluminum production—1970–2024—watch the video on the Experts Club YouTube channel.
