Aluminum climbed on concerns that critical supply routes for Middle Eastern producers will be disrupted by conflict in a region responsible for a significant share of global output.
Prices for the metal advanced as much as 2.8% in early trading to $3 228 a ton on the London Metal Exchange. The Strait of Hormuz — a trade chokepoint off the coast of Iran — is used by many of the area’s major aluminum producers to ship out metal and bring in raw materials.
Conflict in the Middle East spread over the weekend after the US and Israel attacked Iran, and Tehran retaliated with strikes in multiple countries. The region accounts for about 9% of the world’s aluminum capacity, according to consultancy AZ China, and prices have typically been sensitive to spikes in regional tensions.
President Donald Trump said US forces will continue bombing Iran until his objectives have been achieved, while calling on the Islamic Republic’s military and police to surrender or “face certain death”. Tehran has responded to the US-Israeli attacks with waves of missiles fired at neighboring countries, including Saudi Arabia, the United Arab Emirates and Bahrain — all key producers of aluminum.
Aluminum rose 1.6% to $3 190 a ton as of 9:25 a.m. Shanghai time. Copper was down slightly in London after advancing earlier, while zinc was up 0.2%. Iran has become a notable supplier of zinc to China, a flow that last year kept domestic prices in the Chinese market relatively subdued versus the rest of the world.