The metals market is in turmoil: aluminum breaks records
5 March 12:20
Global aluminum prices have risen sharply, reaching their highest level in nearly four years. On the stock exchange, the price of metal exceeded $3,400 per ton, which is the highest since April 2022.
This is evidenced by trading data on the London Metal Exchange.
What is the price of aluminum now?
According to exchange trading data:
- aluminum futures rose by more than 3%;
- the price during trading reached $3,418 per ton;
- at the close of trading, the price was around $3,342 per ton.
This is the highest figure in almost four years.
Why aluminum is becoming more expensive
The main reason for the sharp rise in the cost of the metal was fears of supply disruptions from the Middle East.
One of the largest aluminum producers in the region, Aluminium Bahrain, announced force majeure on its contracts.
The company said it was temporarily unable to ship metal due to the situation in the Strait of Hormuz, which is a key route for transporting raw materials.
According to company representatives, production continues, but deliveries are currently blocked.
Why the Strait of Hormuz is important for the market
On February 28, the US and Israel struck Iran. Tehran responded with strikes on Israel and the Persian Gulf countries, where US military bases are located. The Iranian authorities announced a ban on movement through the Strait of Hormuz. The Islamic Revolutionary Guard Corps threatened that Iran would burn all ships that try to pass through the Strait of Hormuz.
A significant portion of the world’s maritime transport of energy resources and metals passes through the Strait of Hormuz.
Tensions in the region have increased following the escalation of the conflict between Iran and Israel. After the strikes on Iran, the Tehran authorities announced restrictions on traffic through the strait.
According to analysts, the Middle East accounts for about 9% of global aluminum production, so any disruptions in logistics could affect global prices.
What will happen to prices next
Experts note that the metals market is very sensitive to geopolitical risks.
If tensions in the Persian Gulf region continue, aluminum prices may remain high or continue to rise.
Aluminum is a key metal for:
- the automotive industry
- aircraft manufacturing
- packaging manufacturing
- construction
- electronics.
Therefore, fluctuations in its value affect global production chains and prices for finished products.
Read us on Telegram: important topics – without censorship
