Aluminium rises as the Middle East conflict fuels supply worries

Aluminium rose on Tuesday as traders remained alert to supply risks from the Middle East amid the U.S. and Israeli air war against Iran spilling into neighbouring countries. Benchmark aluminium on the London Metal Exchange was up 0.6% at $3,213.50 a metric ton by 1031 GMT. It touched $3,254, highest since January 29, on Monday due to worries about supply from the Middle East, which accounts for 8% of global capacity, and exports its products via the Strait of Hormuz. Iran vowed to attack any ship trying to pass through Strait of Hormuz on Monday. Global aluminium producers paused second-quarter premium offers to Japanese buyers. Meanwhile, available aluminium stocks in the LME-registered warehouses fell to 375,525 tons, lowest level since September, after 45,325 tons of fresh cancellations in Malaysia's Port Klang, daily LME data showed. <0#MALSTX-LOC-GRD> "LME inventories have been drawing since November and physical premiums around the world are elevated, suggesting physical tightness," Morgan Stanley said in a note. The discount for the cash aluminium contract against the benchmark on the LME closed at $10 per ton on Monday, its lowest level in five weeks. Copper fell 2.0% to $12,847 after hitting $12,763.5, its lowest since February 19. With the spike in energy prices and no end to hostilities in sight, the U.S. dollar jumped on safe-haven demand and renewed inflation worries, while stocks tumbled with stocks in top metals consumer China seeing their worst session in a month. A stronger U.S. currency makes dollar-priced metals more expensive for buyers using other currencies. In other LME metals, tin slumped 5.4% to $50,675 a ton. Authorities in Myanmar's autonomous Wa region issued a notice outlining a cost-sharing mechanism for dewatering deep mine shafts at Man Maw, a step toward the gradual restart of tin mining operations, the International Tin Association said. Zinc fell 1.4% to $3,268.50 after hitting its one-month low of $3,248, lead lost 0.7% to $1,948 and nickel was down 0.1% at $17,130.