Aluminium prices surged to a four-year high as rising tensions between the US and Iran heightened concerns over supply disruptions in the Middle East, which accounts for about 9% of global smelting capacity. Restrictions around the Strait of Hormuz have tightened exports and raw material supplies, intensifying market pressure.
The market is witnessing a strong supply squeeze, reflected in steep backwardation levels, with near-term aluminium contracts commanding a premium over longer-dated ones. Analysts expect a significant global deficit this year, potentially exceeding 2 million tonnes, keeping prices elevated.
Other base metals also gained, supported by tight supply conditions and improving demand outlook. Copper rose on expectations of tariffs and limited mine supply, while strong manufacturing activity in China further boosted sentiment across industrial metals.