Aluminium prices have climbed to their highest level since June as stalled US-Iran talks over the Strait of Hormuz raise fresh concerns about supply, while global inventories remain near their lowest level in decades.{alcircleadd}
Aluminium is climbing again, and this time the market’s attention is firmly back on the Strait of Hormuz.
The latest rise comes as negotiations between the US and Iran over reopening the key shipping route appear to have stalled, raising concerns that disruptions to aluminium supplies from the Middle East could last longer than previously expected.
LME aluminium futures rose 1 per cent on Monday, August 10, reaching their highest level since June 23. The metal was trading at around USD 3,337 per tonne on Tuesday, August 11, up 0.6 per cent at 13:15 Shanghai time.
The move marks another leg higher for aluminium after prices gained more than 8 per cent since the end of June.
The Strait of Hormuz is one of the world’s most important shipping routes, and its disruption has implications well beyond oil.
Before the war, the Middle East accounted for around 10 per cent of global aluminium production. Any prolonged difficulty moving material through the region could therefore tighten an aluminium market that is already dealing with historically low inventories.
The latest concern is that the US and Iran remain far apart in their negotiations.