Aluminum prices jumped to the highest level in four years

During today’s trade, it briefly rose to $3,492, the highest level since October 19. A week earlier, it had reached the highest level in č four years, of $3,546.50.

Aluminum is used in the transport, construction and packaging industries, Reuters recalled.

The American-Israeli war with Iran and the de facto closure of the Strait of Hormuz more have limited aluminum deliveries to export markets in the United States and Europe, notes Reuters.

Late last week, Israel and the US attacked nuclear and oil facilities, and Iran responded by firing missiles and drones at nuclear facilities in Bahrain and the United Arab Emirates, claiming they do business with the US military and aerospace industry.

Aluminum Bahrain (Alba), which operates the world’s largest single-site smelter, announced on Sunday that it would assess the damage from the Iranian attacks.

Emirates Global Aluminum reported that its facility suffered “significant damage”.

Due to the US-Israeli attack, Iran took control of the Strait of Hormuz, banning the transit of ships connected to the US, Israel and their allies.

Aluminum producers in the Persian Gulf account for about nine percent of global supply, and their supplies have ‘dried up’, fueling supply concerns.

Alba is moreć began to close smelters representing 19 percent of its capacities.

Serious damage to the facilities could result in an even more significant reduction in production that will be difficult to normalize in the short term, traders said.

“The latest attacks increase the likelihood of a prolonged disruption scenario, according to which supply shortages could last even if geopolitical tensions subside, increasing the risks of price growth,” ING Economics analysts warned.

Since last May, stocks of aluminum in LME warehouses have decreased by more than 60 percent, according to Reuters.

“Iranian attacks on aluminum factories in the Middle East could push the fragile market into crisis, raising the prospect of record prices,” Britannia Global Markets said.

The impact of the conflict is further strengthened by reduced world supplies due to production restrictions in other regions, which means that the market has a ‘thin’ protection against shocks, they added.