By Pratima Desai LONDON, March 9 (Reuters) - Aluminium prices hit four-year highs on Monday as fears of prolonged shipping disruptions in the Middle East due to the U.S.-Israeli war against Iran
Aluminium Prices Reach Four-Year Highs Amid Middle East Shipping Disruptions
Market Impact and Supply Chain Concerns
By Pratima Desai
LONDON, March 9 (Reuters) - Aluminium prices hit four-year highs on Monday as fears of prolonged shipping disruptions in the Middle East due to the U.S.-Israeli war against Iran fuelled concerns about supplies of the metal.
Aluminium Price Movements
Benchmark aluminium was down 1.5% at $3,394 a metric ton at 1711 GMT from an earlier $3,544 a ton, the highest since March 2022 when prices of the metal used in transport, construction and packaging hit a record $4,073.50.
Shipping Disruptions in the Middle East
Conflict in the Middle East has virtually shut the Strait of Hormuz through which aluminium produced in the region is shipped to the U.S. and Europe.
European Supply Concerns
"The Europeans are particularly concerned, as the Gulf aluminum stoppage comes just as long-term supplierMozal is going offline this month," said Marex analyst Ed Meir.
"Some producers are looking to draw down stocks from outside the region so as to fulfill their obligations, but we suspect this is going to be difficult given the preponderance of Russian metal on the exchange (currently sanctioned) and generally low inventories otherwise."
Mozal Smelter Shutdown
In December, South32 <S32.AX> said its 560,000-metric-ton-per-year capacity Mozal smelter would be placed on care and maintenance from mid-March, after talks with utilities and Mozambique's government failed to yield a new power deal.
Market Structure and Price Trends
Backwardation and Contango Shifts
Worries about supplies have flipped the discount or contango for the cash aluminium contract over the three-month forward into a premium or backwardation. It climbed to $47.4 a ton on Friday, the highest since February 2022 and was last around $22 a ton.
Prices for aluminium along the maturity curve going out to 2036 are backwardated.
Broader Metals Market Context
Oil Prices and Global Growth Outlook
Elsewhere, the oil price surge has raised the prospect of slowing global growth and weaker demand for industrial metals, which also came under pressure from the stronger dollar.
Other Industrial Metals Performance
Copper gained 0.6% to $12,943 a ton, zinc climbed 0.9% to $3,327, lead was down 1% to $1,933, tin rose 0.3% to $50,235 and nickel ceded 0.5% to $17,385.
(Reporting by Pratima Desai. Editing by Mark Potter and Tomasz Janowski)
