Aluminum prices posted a record rise this month, as the war in the Middle East disrupted supplies and damaged local production facilities, tightening the global market.

The lightweight metal climbed above $3,500 per ton in London, heading for monthly gains of more than 12%, the highest level since April 2018, despite a broader downward trend in metals during March. Commodities, including base metals, have been heavily impacted by the conflict involving the United States, Israel, and Iran. The Gulf region accounts for about one-tenth of global aluminum production, with exports constrained due to the closure of the Strait of Hormuz, in addition to drone and missile attacks targeting facilities operated by Aluminium Bahrain BSC and Emirates Global Aluminium PJSC.

While both companies have yet to clarify the exact extent of the damage to their facilities, uncertainty remains over the impact on supply and demand balance. Analyst Bernard Dahdah of Natixis SA said in a note that output from EGA’s Al Taweelah plant, which has a capacity of 1.6 million tons per year, could be considered “out of the equation” in the long term. This could shift the market from a surplus of 200,000 tons to a deficit of around 1.3 million tons next year. Dahdah’s assessment is based on the assumption of “significant” damage forcing an uncontrolled shutdown, leading to metal solidification in smelting pots and causing lasting damage that could take at least a year to repair.

In other metals, prices were stable to slightly higher after a Wall Street Journal report said that US President Donald Trump told aides he is prepared to end the US campaign even if the Strait of Hormuz remains largely closed. However, copper, zinc, and nickel are still heading for monthly losses, as the war raises energy costs and triggers warnings about global economic growth.

Aluminum has been the most directly affected metal due to the region’s role as a major supplier, with most of its output exported. These disruptions have pushed up price premiums in other regions, including Japan, while China has seen increased demand for its products as it dominates global production.

Three-month aluminum contracts rose 3.4% to $3,518 per ton on the London Metal Exchange as of 1:26 PM local time. Other metals were more subdued, with copper nearly unchanged at $12,213 per ton, still down more than 8% in March and heading for its largest monthly loss since June 2022.

Bitcoin rose during Tuesday’s trading to reach an intraday high of $68,300 in early Asian hours, as selling activity from large investors known as “whales” declined. Selling pressure in derivatives markets also eased, indicating that bearish positions have become less aggressive, according to a new analysis.

Exchange data from CryptoQuant showed a “shift in behavior” among major market participants, as Bitcoin deposits from whales on major trading platforms declined.

The chart shows that whales were highly active on Binance when Bitcoin dropped to the $60,000 level in early February, sending as much as 11,800 BTC to the exchange in a single day.

As a result, the 30-day moving average of total Bitcoin inflows to exchanges rose to around 4,000 BTC per day being sent to Binance by the end of February. CryptoQuant analyst known as Darkfost said in a post on X that this reflected a clearer distribution phase by large holders.

However, the situation has since eased significantly, with the 30-day moving average declining to around 1,600 BTC per day being sent to Binance, according to the analyst. He added that this drop in whale deposits may indicate a temporary slowdown in selling pressure, with large investors adopting a wait-and-see approach in a still uncertain market environment.

These figures are supported by recent data showing that whales and sharks in the Bitcoin market have continued accumulating over the past two months, a pattern that could eventually lead to a breakout from the current trading range.

The sharp decline in whale deposits also coincided with a drop in the net position change of Bitcoin on exchanges by 89,710 BTC on March 26, marking the largest outflow since December 2024, according to data from Glassnode.

Net position change refers to the 30-day net change in supply held in exchange wallets, which currently stands at around -68,650 BTC as of Tuesday.

Such outflows typically indicate strong accumulation by large holders, which reduces immediate selling pressure in the market.

In addition, the cumulative volume delta (CVD) for perpetual futures rose by 38.1% over the past week to -$361 million, up from -$583 million, reflecting a decline in selling pressure, according to Glassnode’s latest market momentum report.

The report noted that although the indicator remains in negative territory, the move suggests that bearish positions are becoming less aggressive, while buyers are gradually returning to the market.

Brent crude futures headed on Tuesday toward their largest monthly gain on record, amid highly volatile trading, as investors assess the possibility of US President Donald Trump ending the war with Iran against the risk of supply shocks from a prolonged closure of the Strait of Hormuz.

Brent crude futures for May delivery, which expire on Tuesday, rose by $1.80, or 1.60%, to $114.58 per barrel as of 11:25 GMT. Meanwhile, the more active June contract fell by 32 cents, or 0.3%, to $107.07 per barrel.

US West Texas Intermediate crude futures for May delivery rose by 64 cents, or 0.62%, to $103.52 per barrel at the same time.

Data from the London Stock Exchange Group showed that front-month Brent contracts are on track for a record monthly gain of about 58%, the largest since records began in June 1988. US crude has also risen about 54% this month, marking its biggest jump since May 2020.

Sharp volatility as front-month contracts expire

Tuesday’s session saw significant volatility, with front-month Brent contracts moving within a wide range between gains of 2.5% and losses of 1.3% compared with Monday’s close.

In a post on Truth Social, Trump called on countries that did not support the United States in its coordinated strikes against Iran and are now unable to obtain jet fuel to buy US oil and head to the Strait of Hormuz and “simply take it,” as he put it.

This post followed a Wall Street Journal report stating that Trump told his aides he is willing to end the military campaign against Iran even if the strait remains largely closed, with reopening to be addressed later.

The US president had also warned that the United States would “destroy” Iran’s energy facilities and oil fields unless Tehran reopens the waterway.

Sugandha Sachdeva, founder of New Delhi-based SS WealthStreet Research, said that diplomatic signals remain mixed, but the situation on the ground suggests that uncertainty will persist. She added that repairing damaged infrastructure will take time even if de-escalation occurs, which will keep oil supplies tight.

Risks to seaborne energy supplies

In a sign of the risks facing seaborne energy supplies, Kuwait Petroleum Corporation said on Tuesday that its crude oil tanker “Al-Salmi,” with a capacity of about two million barrels, was attacked by Iran while docked at a port in Dubai. Officials also warned of the risk of oil spills in the region.

At the same time, Iran-backed Houthi forces in Yemen launched missiles toward Israel on Saturday, raising concerns about potential disruptions to shipping through the Bab el-Mandeb Strait, the waterway linking the Red Sea and the Gulf of Aden for vessels traveling between Asia and Europe via the Suez Canal.

Data from Kpler showed that Saudi Arabia has rerouted its crude exports from the Gulf through this route, with about 4.658 million barrels per day being shipped to the Red Sea port of Yanbu, compared with an average of just 770,000 barrels per day in January and February.

Lin Yi, Vice President of commodities and oil markets at Rystad Energy, said that remaining spare capacity in the oil market is being gradually absorbed, increasing the market’s vulnerability to a prolonged closure of the Strait of Hormuz. He added that this means the world is moving closer to an actual shortage of oil supplies across a broader geographic range, which could further support upward momentum in oil prices in the coming period.

The US dollar is on track on Tuesday to post its largest monthly gain since July, emerging as the strongest safe-haven asset amid the war in the Middle East, which has pushed oil prices higher while most other assets declined and increased the risk of a global recession.

Currencies of advanced economies were largely stable during Tuesday’s trading, with the Japanese yen holding at ¥159.62 per dollar, while the euro showed little change at $1.1472, and the British pound rose 0.14% to $1.3202. However, all three currencies are heading for losses of more than 2% in March. For the euro and the pound, this marks the largest monthly decline since July, while the yen is set for its biggest drop since October.

The dollar has been supported by the United States’ position as a major energy producer, in addition to investors’ shift over the past month toward holding cash as a safer option amid the conflict.

Recent developments in the war had limited impact on currency movements on Tuesday, although they reinforced broader monthly trends in the markets. A Wall Street Journal report said that US President Donald Trump is willing to halt attacks on Iran without forcing it to reopen the Strait of Hormuz. Lee Hardman, a senior currency analyst at MUFG, said that the lack of a clear plan to reopen the strait continues to pose an upside risk to global energy prices, adding that the likelihood of a larger hit to economic growth outside the United States continues to support the strength of the US dollar.

Asian currencies recorded some of the largest losses during this period. In Tuesday’s trading, the dollar rose 1% against the South Korean won to 1,534 won, a level previously seen only after the 2009 global financial crisis and during the Asian financial crisis of 1997–1998.

The dollar index, which measures the US currency against a basket of six major currencies, rose to its highest level since May at 100.64 points before stabilizing at 100.47 points, posting gains of about 2.8% since the start of March.

In foreign exchange markets, renewed threats of intervention by Japanese authorities to support the yen were among the key factors being monitored by investors. These warnings helped limit further selling pressure on the Japanese currency, which is currently trading near its weakest levels since July 2024. Japan’s Finance Minister Satsuki Katayama said on Tuesday that Tokyo is ready to act “on all fronts” to counter excessive market movements, noting that authorities are observing increased speculative activity in both currency and oil futures markets.

Since the outbreak of the war, the dollar has outperformed several assets traditionally considered safe havens. Rising inflation expectations have weighed on bond markets, while liquidation of positions has pressured gold, and the energy price shock has negatively affected Japan’s trade balance. At the same time, Swiss authorities have indicated that they may intervene to limit any sharp appreciation of the Swiss franc.

The dollar rose about 4% in March against the Swiss franc to around 0.80 francs, and also broke key resistance levels against the Australian and New Zealand dollars in recent sessions.

The Australian dollar declined for eight consecutive sessions, hitting a two-month low of $0.6834, down 3.7% in March, while breaking a key support level at $0.6897. The New Zealand dollar also fell for six straight sessions, approaching a break below the $0.57 level.

Analysts believe that the main risk facing the dollar could come from upcoming US labor market data, scheduled for release during the Good Friday holiday, which typically sees lower market liquidity. Strategists at Union Bancaire Privée also warned of a potential shift in the traditional relationship between currency and equity markets, where the dollar usually rises when stocks fall.

They noted that the relationship between currency and equity markets has remained relatively stable since the outbreak of the conflict, but could change if markets begin pricing in a longer-lasting conflict amid still-uncertain outcomes.

Meanwhile, eurozone inflation data for March is due later in the session, while German data released on Monday pointed to the possibility of inflation returning above the European Central Bank’s 2% target.