Aluminium jumps to 4-year high on Trump’s blockade of Hormuz
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The Middle East accounts for about 9 per cent of global aluminum output.
PHOTO: BLOOMBERG
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LONDON – Aluminium jumped to a four-year high in London, as US President Donald Trump’s blockade of Iranian ports threatened more disruptions to shipments from the Persian Gulf.
The lightweight metal rose 3.1 per cent on April 13 to settle at US$3,607.50 a tonne on the London Metal Exchange, reigniting a rally driven by supply shortages due to the Middle East war. Mr Trump ordered a blockade of the Strait of Hormuz following the weekend’s deadlock in US-Iran peace talks.
Spot aluminium contracts also rallied further above futures, with the spread on cash contracts over those for delivery in three months increasing as much as 43 per cent from April 10 to reach US$95.50 a tonne – the highest since 2007. A premium for spot contracts is known as backwardation, and it signals a growing call on immediate deliveries as buyers hunt for alternative sources of the metal.
Aluminium is a metal used widely in transportation, construction and packaging. It is a critical component in solar panels, electrical transmission systems, wind turbines, batteries and electric vehicles.
The Middle East accounts for about 9 per cent of global aluminium output. Emirates Global Aluminium PJSC, the region’s top producer, has invoked force majeure clauses on at least some deliveries after one of its smelters was put out of action by an Iranian attack earlier in April. So far in 2026, futures have surged by 20 per cent.
Other base metals were mostly higher on April 13, as the failure of US-Iran negotiations in Pakistan over the weekend unravelled a brief bout of market optimism. Metals are broadly at risk from weaker demand as soaring energy prices hurt the global economy, although aluminium has gained due to the supply crunch arising from the war.
Still, elevated prices are curbing demand in China as inventories in the top metal-consuming country have risen to the highest since 2020.
“Shanghai aluminium will likely start to price in the reality of weak Chinese demand going forward,” said analyst Chen Jingmin at Zijin Tianfeng Futures. Weak China fundamentals will cap the upside in London aluminium, she said. BLOOMBERG
