Aluminium prices jumped on Monday as traders prepared for the possibility of a deeper supply shock after Iranian attacks over the weekend struck two of the Middle East’s largest aluminium producers.
The benchmark three-month aluminium contract on the London Metal Exchange climbed 3.85% to $3,423 per metric ton by 0718 GMT. Earlier in the session it reached $3,492, its highest level since March 19 and close to the four-year peak of $3,546.50.
On the Shanghai Futures Exchange, the most-traded aluminium contract finished the session up 3.43% at 24,725 yuan ($3,578.82) per ton. During the day it had risen as much as 3.91% to 24,840 yuan, also the highest level since March 19.
Aluminium Bahrain, operator of the world’s largest single-site smelter, said on Sunday it was evaluating damage caused by the Iranian strikes. Emirates Global Aluminium reported that its facility had suffered “significant damage”.
Concerns about aluminium supply disruptions have intensified since the outbreak of the U.S.-Israel conflict with Iran. Producers in the Gulf region—responsible for roughly 9% of global output—have been unable to ship material through the Strait of Hormuz.
Alba has already begun shutting down smelting lines accounting for about 19% of its production capacity earlier this month. Traders said that if the damage to facilities proves severe, additional output cuts could follow and may take time to reverse.
“The latest attacks increase the probability of a prolonged disruption scenario, where supply losses could persist even if geopolitical tensions ease, reinforcing upside risks to prices,” analysts at ING Economics said.
Elsewhere, base metals broadly advanced across the complex as U.S. President Donald Trump repeatedly stated that Washington and Tehran were holding talks to end the war, even as additional U.S. troops arrived in the Middle East and Iranian officials warned they would not accept humiliation.
Oil prices also moved higher, with Brent crude on track for a monthly gain of more than 60%.
On the London Metal Exchange, copper was the only metal to decline, slipping 0.02%. Zinc rose 1.44%, lead gained 0.42%, nickel increased 0.75%, and tin advanced 1.19%.
On the Shanghai Futures Exchange, copper edged up 0.06%, zinc gained 1.23%, lead rose 0.12%, nickel added 0.47%, and tin jumped 4.20%.