Metals-Supply concerns, lower stocks drive aluminium to seven-week high

Providing further support are worries about supply from Gulf producers and rising oil prices as negotiations between the United States and Iran over a peace deal and the reopening of the Strait of Hormuz hit an impasse.

The U.S.-Iran war has disrupted aluminium shipments from producers in the Middle East, which account for 9% of global capacity.

Meanwhile, available aluminium stocks in LME-registered warehouses are at 244,550 tons, the lowest since April 2025, dominated by Russian-made metal, which many traders avoid.

In other LME metals, copper rose 0.3% to $14,195, having closed on Monday at an all-time high of $14,160 as outflows to the U.S. ahead of potential U.S. import tariffs reduced availability.

The cash-to-three-month spread on the LME remains in sharp backwardation at $145.5 a ton, signalling tightness for nearby supply.

LME zinc fell 0.3% to $3,723.50, while tin gained 0.4% to $55,750. Lead and nickel added 0.1% to $1,904 and $16,925, respectively.

Aluminium extended its gains to a seventh consecutive session after Norsk Hydro said its Alunorte plant in Brazil had cut alumina output to 50% of capacity due to reduced supply of natural gas. The plant has annual production capacity of 6.3 million tons of alumina.

Aluminium is up 6% so far in August, having broken above its 200-day moving average last week, which now provides support at $3,219. The next resistance level is the 100-day moving average at $3,396.

"Aluminium had a lot of resistance at $3,200. Once it got through there, it was only a matter of time until it started to trend higher," said a metals trader. "Any bullish headline just acts as a catalyst and adds fuel to the fire."