As the US-Israel conflict with Iran persisted, blocking the Strait of Hormuz, Emirates Global Aluminium (EGA) secured an alternative route for export activities last week, easing the global trade disruption along the Middle East route. The impact was immediate, as the London Metal Exchange (LME) aluminium prices fell nearly 1 per cent on March 18, with the trend continuing till the latest close of LME aluminium on March 24.

Both LME aluminium cash bid and offer prices saw a decline of 0.28 per cent. The bid price eased to USD 3,242 per tonne on March 24 from USD 3,251 per tonne on March 23, as the cash offer settled at USD 3,242.5 per tonne, slipping from USD 3,251.5 per tonne.  

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The LME aluminium three-month contract saw the bid at USD 3,217 per tonne, dropping 0.09 per cent from USD 3,220 per tonne. The offer pulled back to USD 3,218 per tonne, dropping 0.12 per cent from USD 3,222 per tonne.

A similar easing trend was noticed in the future contracts. The December 2027 bid as well as offer declined by 0.27 per cent. While the bid shifted to USD 2,965 per tonne from USD 2,973 per tonne, the offer settled at USD 2,970 per tonne from USD 2,978 per tonne. 

The only upward trend was noted in LME aluminium three-month Asian Reference Price, which was recorded at USD 3,260 per tonne on March 24 from USD 3,199 per tonne on March 23, increasing 1.91 per cent. 

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On the inventory side, LME aluminium opening stocks dropped further from 429,675 tonnes on March 23 to 427,675 tonnes on March 24, decreasing by 0.47 per cent. Live warrants as well as cancelled warrants remained unchanged from the previous session. The former closed at 273,050 tonnes and the latter at 154,625 tonnes.

The declining trend reappeared again on the LME alumina Platts, where the price witnessed a hike on the March 24 session. The price settled at USD 304.36 per tonne, slipping by 0.18 per cent from the previous session’s USD 304.91 per tonne.

However, commenting on the slip in prices, Bart Melek, head of commodity strategy at TD Securities, warned the market to brace for frequent fluctuations. He noted, “Despite the drop from recent highs, prices are expected to remain elevated due to the growing supply squeeze caused by the Middle East conflict, driven production disruptions and the pending plunge in inventories.”

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