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Aluminium Futures Surge to Four‑Year High Amid Hormuz Tensions
Aluminium futures climbed to roughly $3,550 per tonne in April, the strongest price level since March 2022. The rally is driven primarily by supply disruptions in the Gulf region after the closure of the Strait of Hormuz and attacks on key smelters, outweighing broader metal‑price weakness caused by slowing global demand and high energy costs.
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Aluminium Prices Reach Four‑Year Peak
London Metal Exchange (LME) aluminium futures surged to about $3,550 per tonne in April, marking the highest level recorded since March 2022. The rally comes against a backdrop of heightened geopolitical risk around the Strait of Hormuz, a critical chokepoint for global commodity flows.
While most base metals have felt pressure from expectations of weaker demand and soaring energy costs that could dampen world‑wide economic growth, aluminium has bucked the trend. The primary driver is a tightening of supply rather than a surge in demand.
The Gulf region, responsible for roughly 9 % of primary aluminium production, has experienced severe logistical bottlenecks since the strait was closed at the end of February. Shipments have been delayed, heightening concerns over inventory shortfalls.
Compounding the issue, Iran recently targeted two regional smelters, including Emirates Global Aluminium’s Al Taweelah plant – the largest producer in the Middle East – forcing a temporary shutdown. These events have pushed LME traders to bid up prices, resulting in a noticeable premium on the exchange.
Analysts warn that if the Hormuz impasse persists, aluminium prices could remain elevated, benefiting producers but pressuring downstream manufacturers and end‑users who rely on the metal for automotive, construction, and packaging applications.