Aluminum prices surged on Wednesday as supply disruptions in the Middle East continued, with three-month futures in London rising 0.6% to over $3,400 a tonne, nearing a four-year peak. This marks a 4% gain over the past week, driven by the ongoing conflict in the region, which contributes approximately 9% to global aluminum output.
Two major smelters in Qatar and Bahrain declared force majeure on finished metal shipments due to the closure of the Strait of Hormuz. Consequently, Rio Tinto has raised its premium offer for aluminum to Japanese buyers by 40%, now set at $350 a tonne for second-quarter shipments—the highest rate since 2015. Japan’s import dynamics significantly influence regional pricing benchmarks.
Additionally, premiums for primary metal shipments over the London Metal Exchange cash price have seen a rise, paralleling increases in the Shanghai Futures Exchange. This may boost Chinese exports, which are expected to rise by over 5% in March compared to the previous year, supported by demand in sectors like artificial intelligence and solar panels.
