Aluminium hits four-year peak after Iran attacks Middle East smelters

Aluminium prices reached their highest point in four years on Monday due to Iranian airstrikes targeting two major aluminium producers in the Middle East over the weekend. The benchmark aluminium price on the London Metal Exchange rose by 4.7% to $3,453 per metric ton at 1048 GMT. Earlier in the session, prices for the metal, which is vital in transport, construction, and packaging, peaked at $3,492. The ongoing U.S.-Israeli conflict with Iran, along with the closure of the Strait of Hormuz, has already limited aluminium shipments to the United States and Europe. Aluminium Bahrain, the operator of the largest single-site smelter worldwide, announced it is evaluating the damage caused by the Iranian strikes. Emirates Global Aluminium reported that its facility suffered "significant damage." Earlier this month, Alba revealed it would stop smelting lines that account for 19% of its capacity. Britannia Global Markets warned that “Iran’s strikes on Middle Eastern aluminium plants are putting a fragile market at risk, leading to the possibility of record prices.” They noted that the conflict is worsening the situation because production issues elsewhere have significantly reduced global inventories, leaving little room for market shocks. Aluminium prices previously hit a record high of $4,073.50 per ton in March 2022 following Russia's invasion of Ukraine, which is a leading producer of the metal. Aluminium stocks in LME-approved warehouses have decreased by over 60% since last May, now standing at 418,675 tons.