Aluminum futures hover above $3,310/tonne on tight supply
UK aluminum futures were around $3,310 per tonne, an over three-week high, with tight physical conditions and declining inventories. US-Iran hostilities add risk to potential Gulf supply returns.
Aluminum futures in the UK hovered around $3,310 per tonne, an over three-week high, amid continued supply tightness and declining inventories.
The latest escalation in US-Iran hostilities has raised uncertainty again over the potential return of Gulf aluminum supplies.
Last month, the Alunorte plant in Brazil, the world’s largest alumina refinery outside China, was forced to cut production to half of its capacity due to a shortage of natural gas from its supplier, adding to the difficulties facing its main client, Norsk Hydro.
Meanwhile, LME inventories remained near a 36-year low, while SHFE inventories fell 3% from the previous week, underscoring tight conditions in the physical market.
However, some of the supply pressures could be partly eased by planned capacity restarts and expansion projects among several producers.
Increased Chinese exports may also provide some relief to the global market, with shipments from the world’s largest producer rising 18.7% year-on-year in July.