Aluminum prices rose on Tuesday, and the main price spread for contracts on the London Metal Exchange jumped, with the market pricing in confirmations that a smelter in the Emirates will face a long repair period after an Iranian attack that occurred late last month.

The aluminum contract for three-month delivery on the London Metal Exchange rose by 1.1% to reach $3,507 per metric ton in official open-outcry trading.

Emirates Global Aluminium said on Friday that restoring full production at the Al Taweelah smelter, which produced 1.6 million tons of cast metal in 2025, may take up to a full year, after entering an emergency shutdown following the attacks of March 28.

Marex analyst Ed Meir said in a note that this represents a relatively long period of downtime, adding that a major disruption in the Gulf region may push the aluminum market into a noticeable deficit during the current year.

The premium of the spot aluminum contract on the London Metal Exchange compared to the three-month contract reached $77 per ton on Tuesday, which is the highest level since 2007, compared with $61 in late March, indicating a narrowing of the supply available for immediate delivery.

In the broader markets, investors adopted a wait-and-see approach with the approaching deadline imposed by American President Donald Trump to reach an agreement with Iran, which threatens to escalate the conflict.

At the same time, copper on the London Metal Exchange fell by 0.1% to $12,344 per ton in official trading, affected by the rise in inventories within the exchange system.

Goldman Sachs had raised on Monday its expectations for the global copper market surplus this year to 490,000 tons compared to a previous expectation of 380,000 tons, after economists at the bank estimated that the rise in energy prices may cut about 0.4 percentage points from global GDP growth.

Daily data released by the London Metal Exchange showed that copper inventories in its registered warehouses rose to 378,775 tons, which is the highest level in eight years, after inflows amounting to 16,125 tons in Asia, Europe, and the United States on April 2.

In the rest of the metals traded on the London Metal Exchange, zinc rose by 1.8% to $3,322.5 per ton, while lead stabilized at $1,933 per ton, and they had recorded earlier in the session the highest level since March 11.

In contrast, tin fell by 0.6% to $46,000 per ton, and nickel fell by 0.5% to $17,000 per ton.

Bitcoin prices fell on Tuesday to drop below the $69,000 level, in light of a decline in risk appetite among investors ahead of the deadline set by US President Donald Trump for Iran to reopen the Strait of Hormuz or face the possibility of military action.

The world's largest cryptocurrency was traded at a decrease of 0.8% at $68,525.1 by 03:06 AM US Eastern Time (07:06 GMT).

Bitcoin had risen briefly above the $70,000 level on Monday driven by optimism regarding the possibility of reaching a ceasefire, but it failed to maintain those gains.

Traders prepare for the possibility of American strikes against Iran as the deadline approaches

Market sentiment deteriorated after Iran rejected a ceasefire proposal supported by the United States, and instead demanded broader conditions, which increased the probabilities of the conflict escalating.

Trump had warned that Iran might be "wiped out" if it does not comply with the deadline he set at eight in the evening US Eastern Time, signaling the targeting of critical infrastructure such as power plants and bridges.

This tension led to the disruption of global markets, as oil prices jumped to above $110 per barrel as a result of the disruptions in the Strait of Hormuz, which is considered one of the most important corridors for the transport of oil in the world.

The rise in energy prices also led to the strengthening of concerns regarding inflation and pushed investors toward traditional safe havens such as the US dollar.

In the recent period, Bitcoin has become increasingly moving in parallel with risk appetite in global markets, as geopolitical risks overshadowed the previous optimism regarding diplomatic progress.

American inflation data under the microscope

The focus of investors is also turning toward American economic data, especially the Consumer Price Index report for March scheduled for release on Friday.

It is expected that the rise in energy prices linked to the conflict in the Middle East will lead to an increase in inflation rates, which may strengthen expectations that interest rates will remain high for a longer period.

This scenario may constitute an additional pressure factor on Bitcoin, which often faces difficulties in environments characterized by high interest rates.

Cryptocurrency prices today: Alternative currencies continue to decline

Most alternative cryptocurrencies also fell on Tuesday, continuing their losses amid a state of caution in the markets.

Ethereum, the second largest cryptocurrency in the world, fell by 1.5% to $2,103.92.

Ripple, the third largest cryptocurrency, also fell by 2.4% to $1.31.

Oil prices hovered around the level of $110 per barrel on Tuesday, with the approaching deadline set by American President Donald Trump for Iran to reopen the Strait of Hormuz or face military attacks.

Brent crude futures contracts fell by 95 cents, or 0.9%, to reach $108.82 per barrel by 09:20 GMT. Earlier in the session, West Texas Intermediate (WTI) crude contracts recorded the highest level in four weeks, exceeding $116 per barrel, but they gave up their gains later to decline only 11 cents to $112.30.

WTI crude usually trades at a price discount compared to Brent, however, this pattern was reversed in the current market, as near-delivery shipments became higher in price. This is due to the fact that the benchmark WTI contract is for May delivery, while the Brent contract is for June delivery.

Trump granted Iran a deadline until eight in the evening Washington time (midnight GMT) to reopen the strait, through which about one-fifth of global oil supplies usually pass. Iranian forces had effectively closed the strait after the start of the American and Israeli attacks on February 28.

Trump said that if Tehran does not comply, then "every bridge in Iran" will be destroyed by midnight Wednesday US Eastern Time, adding that "every power plant in Iran will be out of service, burning and exploding and will not be used again."

In response to an American proposal via the mediator Pakistan, Iran rejected the ceasefire, confirming that ending the war permanently is a fundamental condition, rejecting the pressures to reopen the strait.

The exports of a number of Gulf producers have already collapsed due to the restrictions imposed on passage through the strait, which led to a sharp rise in oil prices. According to an analysis by Reuters, Iran, Oman, and Saudi Arabia achieved significant financial gains from this situation, while other countries that do not possess alternative shipping routes suffered losses of billions of dollars.

It is expected that the UN Security Council will vote on Tuesday on a draft resolution to protect commercial navigation in the strait, but in a significantly weakened version after China's objection to granting a mandate to use force, according to diplomats.

The conflict also led to the rise of spot premiums for WTI crude to record levels, with Asian and European refineries racing to compensate for supplies coming from the Middle East.

In the same context, the Saudi oil company Aramco raised the official selling price for Arab Light crude to Asia for May delivery, recording a record premium of $19.50 per barrel above the Oman/Dubai average.

In another development, Russia announced on Monday that Ukrainian drones targeted the Caspian Pipeline Consortium terminal on the Black Sea, which handles about 1.5% of global oil supplies, while the Ministry of Energy in Kazakhstan confirmed on Tuesday that oil shipments through the facility remain stable.

The OPEC+ alliance had agreed on Sunday to increase oil production quotas by 206,000 barrels per day in May, however, this increase may remain largely theoretical because some key members are unable to raise production due to the continued closure of the Strait of Hormuz.

The dollar maintained its proximity to its recent highs on Tuesday, while traders await a deadline imposed by the United States on Iran to reopen the Strait of Hormuz to shipping traffic, or face attacks on its infrastructure.

The war in the Middle East and the closure of the vital maritime corridor in the Gulf led to a sharp rise in energy prices, which pushed investors toward the dollar as the most effective safe haven, a matter that strengthened the power of the American currency, especially in Asian markets.

Even though hopes of reaching an agreement or achieving a diplomatic breakthrough limited dollar purchase operations during the Easter holiday, markets remained tense, with a lack of sellers for the American currency ahead of the deadline set by the American President Donald Trump at eight in the evening US Eastern Time.

The Japanese yen fell to 159.80 against the dollar, close to its lowest levels in decades, which are levels that pushed Japanese authorities to intervene in the market in the year 2024.

Brent Donnelly, president of Spectra Markets, said: "The market is holding long positions on the dollar in anticipation of more escalation, but the performance of stocks, gold, and the offshore yuan limits the gains of the American currency." He added: "It is difficult to provide high-confidence forecasts in such a situation... we will wait until eight in the evening to see the nature of the attacks that Iran or the United States and Israel may launch in the meantime."

Trump had stated on Monday that Iran could be "wiped out in one night," adding that that night "might be tomorrow night." He also pledged to destroy Iranian power plants and bridges, rejecting fears that this would be considered a war crime or that it would lead to the alienation of the Iranian people.

The US dollar index rose by a slight percentage amounting to 0.05% to 100.03, after it recorded last week 100.64, which is its highest level since May 2025.

Thu Lan Nguyen, head of FX and commodity research at Commerzbank, said:

"The Iranian leadership showed, surprisingly to many, its ability to exercise complete control over the Strait of Hormuz," adding that "it is already clear that Iran intends to use this control to serve its long-term interests."

Iran and Israel exchanged attacks on Tuesday at a time when Tehran refuses to reopen the strait. Israel said that it carried out a wave of air strikes targeting Iranian government infrastructure, while defenses intercepted Iranian missiles over Israel and Saudi Arabia.

The euro stabilized almost at $1.1535, while markets price three increases in interest rates by the European Central Bank by the end of the year, in light of the confirmation of the bank's officials of their readiness to act to confront inflation.

Dimitar Radev, a member of the European Central Bank, warned that inflation expectations in the eurozone may rise at a faster pace than they were previously, which necessitates the bank's readiness to raise interest rates quickly if sustained price pressures appear.

As for the Australian and New Zealand dollars, which fell sharply with the escalation of fighting and Iranian attacks on energy infrastructure in the Middle East in late March, they recovered from their lowest levels but remained weak at $0.6912 and $0.57 respectively.

The South Korean won is still trading above the 1500 level against the dollar, which is a level that was not recorded previously except during crises such as the global financial crisis in 2009 and the crisis of the late nineties. Also, the Indonesian rupiah dropped to a record low level, while the Chinese yuan maintained its relative stability that it witnessed in March.

Analysts at Commonwealth Bank of Australia said that the dollar may fall slightly in the short term due to optimism that the United States may end the war with Iran. But they added:

"There are three parties in the war: the United States, Israel, and Iran. What matters to the global economy and currency markets is whether the Strait of Hormuz is open or not. The exit of the United States from the conflict does not mean the reopening of the strait."