Geopolitical Tensions Push Aluminum Prices to 2-Year Peak

Key Details Aluminum reached its strongest performance in nearly two years, climbing toward $3,500 per ton on the London Metal Exchange with a 10.4% monthly gain in March. This marks the metal's best month since April 2024, bucking the broader downtrend seen across other commodities during the same period. Why It Matters Middle East conflicts have disrupted approximately 10% of global aluminum production concentrated in the Persian Gulf region. Attacks on major facilities operated by Aluminium Bahrain BSC and Emirates Global Aluminium PJSC have raised supply concerns, with the Strait of Hormuz closure further restricting exports. Analysts warn that significant damage to EGA's Al-Taweelah plant (1.6 million ton annual capacity) could flip the market from a 200,000-ton surplus to a 1.3 million-ton deficit. Market Outlook Damage to smelting facilities could require at least one year for repairs due to metal solidification in the production circuit. While peace negotiations between the U.S. and Iran show some progress, uncertainty persists about long-term supply impacts. Other metals like copper and zinc posted monthly declines as energy costs rise from the conflict, offsetting some gains from improved geopolitical sentiment.