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Aluminum reaches three-month highs following US airstrikes against Iran

Aluminum reaches three-month highs following US airstrikes against Iran

Aluminum prices rose to a three-month high on Monday, as U.S. strikes on Iran's nuke facilities raised the possibility of higher energy costs and disruptions in shipments from the Middle East.

In some areas, energy can account for 40-45% or more of the costs associated with aluminium smelting.

Investors' fears about an escalation of conflict in the Middle East and disruption to oil supplies increased after President Donald Trump said that the U.S. would attack other targets without a peace agreement with Israel.

Benchmark aluminium rose 0.5% to $2,561 per metric tonne by 0916 GMT, after reaching its highest level since March 21, at $2654.50.

Alastair Munro is a senior base metals analyst at broker Marex. He said that Middle East countries produce 9% of all aluminum in the world. "If the Strait of Hormuz was blocked, this could have an impact on shipments."

Analysts say that if Iran closes the Strait of Hormuz then global supplies will be further disrupted, as Middle East production depends on imports of bauxite, alumina and aluminium raw material.

The LME market focused elsewhere on large holdings in cash copper contracts, warrants (title documents that confer ownership) and premiums for short-term copper contracts.

LME data shows a company with a dominating position of over 90% 0#LMEWHC> on copper warrants and contracts for cash.

The premium or the backwardation of the Cash Copper Contract over the Three-Month Forward The price of a ton closed on Friday at $274, which is the highest level since October 2022. Prior to last month, the premium was only $3.

Copper inventories at LME-approved warehouses are on the decline. . A large amount of copper that was stored on the LME was shipped to the U.S. where the prices skyrocketed after President Trump ordered a probe into potential tariffs on imports of copper.

London's exchange reacted on Friday, imposing restrictions for holders of large positions on near-term contracts.

Copper for three months was down by 0.1%, at $9,619 per ton. Lead rose by 0.4%, to $2,000; tin fell 0.1%, to $32,665; and nickel retreated 1%, to $14,840.

Zinc production, which uses a lot of energy, increased by 1.1% to $2,660 per ton.

(source: Reuters)