Aluminum Prices Experience Largest Gain in Three Weeks Amid US-Iran Tensions Easing

Aluminum Prices Surge as US-Iran Ceasefire Holds

Aluminum prices jumped the most in three weeks on Thursday, alongside other industrial metals, as signs that a US-Iran ceasefire remains in place reduced fears of a full-blown war that may drag down economic growth. The lightweight metal rose as much as 2.1%, the biggest intraday increase since April 13, while other risk assets, including US equities, also gained.

The US downplayed the prospect of a return to active war with Iran after a day of clashes involving ships in the Strait of Hormuz and missile strikes against the United Arab Emirates. General Dan Caine, the chairman of the Joint Chiefs of Staff, told reporters at the Pentagon on Tuesday that attacks by Tehran on vessels in the Persian Gulf and the UAE did not constitute a breach of the ceasefire. Defense Secretary Pete Hegseth confirmed that the truce, which began just under a month ago, is still in place.

Aluminum prices were also supported by supply tightness in the physical market. The effective halt of the Strait of Hormuz disrupted metal shipments out of the region, which accounts for nearly 10% of global supply. Iranian drone and missile strikes on two of the largest smelters in the region in late March further worsened the supply outlook, as it takes time to fully restart the plants.

Read also: Market Analysis: Key Stocks to Watch - Narayana Hrudayalaya, ABB India, Federal Bank, Premier Energies, Ather Energy and More

Aluminum prices have gained 14% since the war broke out in late February. The metal climbed to $3,582.00 a ton on the London Metal Exchange as of 12:05 p.m. New York time.