Global aluminum prices recorded their largest increase in four years on Wednesday. This surge was driven by concerns over supply disruptions of the metal from the Middle East, where logistical difficulties have arisen.
This is reported by Finway
Price Increases on Exchanges and Record Levels
The cost of aluminum futures contracts on the London Metal Exchange (LME) reached $3379.8 per ton, which is 3.1% higher compared to previous figures. During trading, the price of aluminum exceeded the $3400 per ton mark for the first time since April 2022.
Impact of Logistical Issues and Force Majeure
One of the largest aluminum producers in the Middle East, Aluminium Bahrain (Alba), declared force majeure on contracts due to the inability to ship products. The reason lies in the complications of transportation through the Strait of Hormuz, which is a key route for exporting metal from the region.
“This is related to the situation in the Strait of Hormuz, which prevents us from making shipments. Therefore, we continue production, but the metal is here at Alba,” he told Reuters.
According to analysts at AZ China, Middle Eastern countries account for approximately 9% of global aluminum production. In the event of prolonged supply disruptions, the situation could further impact the global market and sustain high metal prices.