Aluminum rallies to four-year peak on improving demand outlook

Aluminum prices rose to a four-year high on Thursday, supported by expectations of supply constraints alongside improved demand outlooks should the United States and Iran reach an agreement to reopen the Strait of Hormuz.

The benchmark three-month aluminum price on the London Metal Exchange (LME) rose 0.5% to $3,636.60 per metric ton by 06:47 AM ET (10:47 GMT), its highest level since March 2022.

Similarly, the most-traded aluminum contract on the Shanghai Futures Exchange closed up 2.9% at 25,635 yuan per ton, marking its strongest level since March 9, according to Reuters.

The agency quoted analysts at JPMorgan Chase forecasting a primary aluminum supply deficit of approximately 1.9 million tons this year—the largest since 2000—resulting from an estimated loss of 2.4 million tons of supply from the Middle East.

Aluminum inventories also declined in LME-approved warehouses and across three major Japanese ports, alongside a drop in Chinese stocks, amid growing expectations of increased overseas orders for Chinese aluminum, according to the Reuters report.

In U.S. equity markets, shares of Alcoa rose in pre-market trading, and Century Aluminum shares also climbed.

Politically, reports from the Wall Street Journal indicated that Washington and Tehran have agreed in principle to hold new talks, following an initial round of negotiations held last week in Pakistan that concluded without an immediate agreement. Citing sources familiar with the matter, the journal added that a date or location for the meeting has not yet been set.

A fragile ceasefire between the two sides is scheduled to expire on April 21. Additionally, U.S. President Donald Trump stated that talks between Israel and Lebanon would take place later today without providing further details, while the Associated Press reported that Lebanon was unaware of such talks.

Nevertheless, indicators of tension in the Middle East persist, particularly regarding the ongoing U.S. naval blockade of Iranian ports. A senior Iranian military commander warned the United States against continuing the blockade, while the U.S. Central Command confirms that no commercial vessels or oil tankers linked to Iran have succeeded in breaking it.