Aluminum Prices Rally for Seven Straight Days to Seven-Week High as Hormuz Standoff Weighs on Supply Outlook
Alina Collins
LME aluminium futures rose for a seventh straight session to $3,337 per tonne, a seven-week high; the Strait of Hormuz negotiation deadlock deepens fears of a lasting global supply gap, compounded by warehouse stocks at a 30-year-plus low.
Why has aluminium rallied seven days running?
LME aluminium climbed as much as 1% on Monday to its highest since June 23 at $3,337/t; the gain had narrowed to 0.6% by 13:15 Shanghai time.
Since late June the metal has gained over 8%, driven by two forces: worsening tensions around the Strait of Hormuz — the shipping chokepoint linking the Persian Gulf to open sea — and fading expectations of a U.S. rate hike, which lifted base metals broadly.
This means → the rally is not just a short-lived "Middle East scare"; a macro tailwind from lower rate expectations is reinforcing it.
Where are the Hormuz talks stuck?
President Trump on Monday added a new condition: Iran must pay compensation for casualties in past conflicts. Tehran restated its own compensation demands.
Both sides hardened simultaneously, sharply lowering expectations of a near-term deal.
In plain terms = each side is raising its price; neither will blink first, making a return to normal shipping through the strait increasingly unlikely in the short run.
Yan Weijun, head of non-ferrous metals research at Xiamen C&D (建發股份), said the stalled talks "should provide a degree of support for aluminium prices."
How critical is Middle Eastern output?
Before the conflict, the Middle East accounted for roughly one-tenth of global aluminium production.
Norwegian producer Norsk Hydro warned last month that if strait trade fails to normalise, the annual global supply deficit could widen to more than 900,000 tonnes.
This means → if Middle Eastern capacity stays offline long-term, new supply from China and Indonesia alone is unlikely to close the gap; the size of that deficit will set the ceiling — or lack of one — for aluminium prices.
How much inventory cushion is left?
LME warehouse stocks have fallen steadily this year to roughly 250,000 tonnes — the lowest since November 1990.
New supply from China and Indonesia has partly offset the shortfall, yet overall inventories remain at historic lows, leaving the market with very little buffer.
In plain terms = think of inventory as a reservoir's water level — it is now at a 30-year low, and if upstream flow is cut again (a Middle East supply disruption), downstream users will feel the shortage fast.
How are other metals faring?
Copper edged up 0.1% on Monday, a relatively muted move.
Most other metals fell, making aluminium's standalone strength all the more conspicuous.
This reflects a supply story specific to aluminium, not a broad metals rally.
Content is for reference only, not financial advice.