Aluminum prices have seen significant volatility in recent years, but the situation has worsened due to ongoing tensions in the Middle East. The US and Israel began airstrikes in Iran two weeks ago, leading to increased concerns about supply chain disruptions.
The Strait of Hormuz, a critical sea passage between the Persian Gulf and the Gulf of Oman, remains closed, affecting aluminum exports from Qatar. Qatalum, a joint venture between Hydro ASA and Qatar Aluminum Manufacturing Co., has reduced its production capacity by 40% due to lower gas supplies.
The conflict is also impacting Europe, as Mozal Aluminum in South Africa goes offline at the end of March. This is particularly concerning for European markets, which rely heavily on Middle Eastern aluminum exports.
Meanwhile, the US aluminum tariffs have escalated prices, leading to a higher Midwest premium. Analysts predict that aluminum prices could reach $1.75 per pound before the month is over.
On the other hand, copper prices have declined due to a stronger dollar and rising inventories. However, demand for copper has been improving, with tighter spreads on all grades of copper.
As fuel costs rise in response to the conflict, freight rates are also increasing, affecting the overall aluminum market. With tensions in the Middle East showing no signs of easing, investors will be keeping a close eye on aluminum prices in the coming weeks.
Source: https://www.recyclingtoday.com/news/volatility-continues-for-nonferrous-metals