Aluminum Prices Soar on Supply Disruptions and Geopolitical Tensions
The aluminum market has seen significant price increases, reaching a seven-week high of $3,385 on the London Metal Exchange. The three-month contract closed up 1.7% on Tuesday, with an accumulated gain of 6% in August.
Supply disruptions are contributing to the price surge, including Norsk Hydro's Alunorte alumina plant in Brazil reducing its capacity utilization to 50%. This will impact global alumina supply chains, affecting around 9% of total capacity.
Elevated oil prices and stalled negotiations between the US and Iran have further intensified supply concerns.
LME registered warehouse available aluminum inventories have fallen to 245,000 tons, their lowest level since April 2025. This tightness is exacerbated by heightened risk aversion among some market participants and a shift in inventory to North America amid expectations of potential US tariffs.