Aluminium prices on the London Metal Exchange rallied strongly on Monday after weekend attacks inflicted damage on major Gulf smelters, lifting benchmark three-month aluminium toward four-year peaks.
At the start of trading, three-month LME aluminium rose to $3,492 per metric ton, a move that represents a 6% jump on the day and the highest level since March 19. Traders noted that a sustained break above $3,546.50 - a level recorded on March 12 - would reopen the path to price peaks last seen during the height of the Covid era in 2022.
The price reaction followed strikes that affected two of the Middle East's dominant aluminium producers. Aluminium Bahrain (Alba), which operates one of the world's largest smelters, said it was evaluating the damage after being hit on Saturday. The state-controlled firm reported that two employees were injured in the attack.
Regional peer Emirates Global Aluminium (EGA) also reported significant damage to one of its sites after it sustained missile and drone strikes over the weekend. EGA is the largest producer of aluminium in the Middle East, while Alba runs the world's largest single-site smelter.
Market participants pointed to the constrained shipping picture for Gulf producers as an additional pressure point. Most aluminium producers in the Gulf - collectively responsible for roughly 9% of global supply - have reportedly been unable to ship to world markets using their usual routes since the onset of the U.S.-Israeli war on Iran, a situation the article cited as resulting from Tehran's effective closure of the Strait of Hormuz.
Investors also moved into listed alumina and mining names tied to the aluminium value chain. Shares of Australian-listed producers reacted to the news, with Rio Tinto rising more than 2% and South32 gaining almost 7% on the day.
At this stage, companies and markets remain in an assessment phase: producers are evaluating the extent of physical damage, the number of injured workers has been confirmed in part, and trading dynamics are responding to both the strikes and ongoing disruptions to Gulf shipping lanes.
What to watch next
- Further updates from Emirates Global Aluminium and Aluminium Bahrain on damage assessments and production outlooks.
- Any changes to shipping availability through Gulf routes that affect exports from the region's smelters.
- Price action around the $3,546.50 technical level, which would signal a move toward earlier peaks.