economy
It's not just oil: Aluminum prices have surged as Iran conflict chokes supply
The U.S. and Israel's war with Iran has upended the supply of aluminum in the Middle East, sending prices of the base metal skyrocketing.
TL;DR
- The war in the Middle East has disrupted aluminum supply, leading to a significant price increase.
- Aluminum is a crucial metal for various industries including electronics, transport, and construction.
- Prices have jumped nearly 8% since the conflict began and are near 4-year highs.
- Bahrain's Alba, the world's largest smelter, has cut production by 19%.
- Lower stock levels and potential further disruptions could push prices towards $4,000 per ton.
- Weak global demand has somewhat moderated the price increase.
- China, the largest aluminum producer, has the potential to stabilize prices by increasing production from idle smelters.
- Retail investors are not expected to heavily invest in aluminum, unlike silver and copper.
- Short positions in aluminum have increased, indicating a belief among some investors that prices will fall.