Iran war prompts US aluminium buyers to seek alternate markets
Due to the conflict in Iran, the aluminium price on the London Metal Exchange hit a four-year high of just over $3,500 per metric tonne this week, its highest level since March 2022.
The conflict in the middle east is already being felt by the global mining sector, with US-based buyers forced to pivot to alternative foreign markets for aluminium supplies after a virtual block on shipments came into effect last week at the Strait of Hormuz.
Two of the top producers in the region – Qatar and Bahrain – ceased deliveries of the metal to all global customers in early March, with Bahrain invoking a force majeure contractual clause because of transit problems in the shipping hotspot.
The middle east accounts for around one fifth of annual aluminium imports to the US and the metal is widely used across the automotive, industrial and appliance sectors.
With US president, Donald Trump’s, tariffs still in place for Canadian aluminium, stateside buyers are looking at alternative markets - including Australia and Europe – to buttress supplies, however it is understood that the Indian market retains a preference edge.
The country remains a major global primary supplier producing around 4-million metric tonnes each year, however shipment times to the US can be lengthy and stretch to two months.
The aluminium price on the London Metal Exchange meanwhile hit a four-year high of just over $3,500 per metric tonne this week, its highest level since March 2022.
Oil and gas prices are expected to continue to surge as the conflict rolls on and increased operational costs and logistical disruptions threaten to affect the prices and output of other commodities.
