Aluminum price jumps the most in three weeks as US-Iran truce holds

Aluminum jumped the most in three weeks, leading other base metals higher, with signs of a US-Iran truce still holding and easing market fears of a full-blown war dragging down global economic growth.

The lightweight metal rose 1.9% in the biggest daily increase since April 13, as US stocks and other risk assets advanced Tuesday. The US played down the prospect of a return to active war with Iran after a day of clashes involving ships in the Strait of Hormuz and missile strikes against the United Arab Emirates.

Aluminum prices have also been supported by supply tightness in the physical market with the Middle East conflict disrupting metal shipments out of a region that accounts for nearly 10% of global supply. Iranian drone and missile strikes on two of the area’s largest smelters in late March further worsened the supply outlook, since it takes time to fully restart the plants.

Prices of the metal have gained 14% since the war broke out in late February. 

Aluminum settled at $3,589.50 a ton on the London Metal Exchange, the highest close since April 24. Copper gained 1% and zinc rose 0.8%.

(By Yvonne Yue Li)