METALS -Aluminium hits three-month highs after US airstrikes on Iran

By Pratima Desai

LONDON, June 23 (Reuters) - Aluminium prices jumped to three-month highs on Monday as U.S. airstrikes on Iran's nuclear facilities raised the prospect of higher energy prices and disruptions to shipments of the metal from the Middle East.

Energy can amount to 40%-45% of aluminium smelting costs in some regions.

Investor fears of an escalation in the Middle East conflict and disruption to oil and gas supplies escalated as President Donald Trump said the U.S. could attack other targets unless a peace deal can be agreed with Israel.

Benchmark aluminium CMAL3 had gained 1.6% at $2,589 a metric ton by 1606 GMT after touching its highest since March 21 at $2,654.50.

"Middle East countries produce almost 9% of the world’s aluminum," said Alastair Munro, senior base metals strategist at broker Marex. "If the Strait of Hormuz is blocked, that could affect shipments."

Global supplies will be further disrupted if Iran shuts the Strait of Hormuz, analysts say, because Middle East production relies on imports of aluminium raw materials bauxite and alumina.

Elsewhere, the LME market focused on large holdings of cash copper contracts and warrants - title documents conferring ownership - and premiums for near-term copper contracts.

LME data shows that one company holds a dominant position of more than 90% 0#LME-WHC in copper warrants and cash contracts.

The premium or backwardation for the cash copper contract over the three-month forward MCU0-3 soared to $340 a ton on Monday, the highest since October 2022. The premium stood at only $3 a month ago.

Part of the problem is the slide in copper inventories in LME-approved warehouses MCUSTX-TOTAL. Much of the copper stored on the LME has been shipped to the U.S., where prices soared after President Trump ordered an investigation into possible tariffs on copper imports.

The London exchange responded on Friday by imposing restrictions on holders of large positions in near-term contracts.

Three-month copper CMCU3 was up 0.3% at $9,658 a ton, lead CMPB3 rose 0.6% to $2,004, tin CMSN3 firmed 0.1% to $32,710 and nickel CMNI3 retreated 1.2% to $14,825.

Zinc CMZN3, production of which requires large amounts of energy, climbed 2.1% at $2,685 a ton.

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