LME index peaks as aluminium gains 15%, copper up 11%

Industrial metals reached a record high on the London Metal Exchange, supported by strong gains in aluminium and a recent rise in copper prices.

The LME index, which tracks six major metals, has climbed nearly 12 per cent in the past four weeks and closed at an all-time high on Thursday. Aluminium prices have risen about 15 per cent since the start of the Iran war. Around 9 per cent of global aluminium output comes from the Middle East, making the market sensitive to disruptions in the region.

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Aluminium has the largest share in the index, and along with copper, the two metals account for almost three-quarters of its value.

JPMorgan Chase & Co. warned that the aluminium market could face a serious supply shortage. Supply has been affected after reported strikes on smelters in Abu Dhabi and Bahrain. At the same time, tensions around the Strait of Hormuz have disrupted shipments, adding pressure to the market.

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Some stability has returned in recent weeks as expectations of a possible ceasefire between the United States and Iran improved market sentiment. Earlier, metals were affected by rising energy costs and concerns about slower global growth.

Copper has also gained strength. It has risen about 11per cent in the past four weeks and is close to its previous record high. Analysts at Mercuria Energy Group and BMO Capital Markets expect further gains, supported by stronger demand from China and possible tariff decisions in the United States.

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On Friday, prices were mixed. Aluminium slipped 0.4 per cent to USD 3,629.50 per tonne, copper fell slightly by about 0.3 per cent, while nickel rose 2.1 per cent.