The price of aluminum has risen sharply since the U.S. and Israel's war with Iran began on Feb. 28, CNBC reported.
At the beginning of the war, three-month LME aluminum futures initially jumped by as much as 10% by March 12 before paring some gains to land around 8% higher, CNBC said, blaming the closing of the Strait of Hormuz for a supply chain disruption.
Aluminum prices are now at $3,370 per ton on the London Stock Exchange, a four-year high, according to CNBC.
Aluminum Bahrain, the world's largest smelter, said it has cut production by 19% as the war in the Middle East continues.
CRU Group, a metal intelligence provider, told CNBC that prices could push toward $4,000 a ton.
"A prolonged conflict will likely drastically change our market outlook for the rest of the year due to the lasting impact this will have on global supply, and the potential negative effects on demand," said Guillaume Osouf, a principal analyst at CRU.
Artem Volynets, CEO of the mining company ACG Metals, told CNBC that China is increasing its aluminum production, which could replenish the global supply.
China keeps its production constrained at 45.5 million tons per year to reduce emissions and prevent overcapacity.
Osouf and Volynets told CNBC they did not expect to see aluminum to become a significant trade for retail investors like silver and copper.
Sam Barron ✉
Sam Barron has almost two decades of experience covering a wide range of topics including politics, crime and business.
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