METALS-Aluminium holds high with Mideast supply disruption in focus
BEIJING, March 11 (Reuters) - Aluminium prices rebounded on Wednesday, as focus shifted back to the loss of global supply amid conflict in the Middle East following a brief sell-off triggered by U.S. President Donald Trump's remarks on the Iran war.
The most-traded aluminium contract on the Shanghai Futures Exchange SAFcv1 added 2.31% to 25,275 yuan ($3,680.81) per metric ton, as of 0213 GMT. The contract lost 1.41% on Tuesday as Trump's comments suggesting an end to the Iran war soon temporarily cooled supply concern.
Benchmark three-month aluminium CMAL3 on the London Metal Exchange was up 0.5% at $3,423 per ton. It touched nearly a four-year high at $3,544 on Monday.
The war in the Middle East, which accounts for around 9% of global aluminium supply, has sent shockwaves through the global aluminium market by effectively freezing shipments via the Strait of Hormuz.
As a result, Qatari smelter Qatalum began shutting down production and Aluminium Bahrain ALBH.BH, which runs one of the world's biggest smelters, declared force majeure on shipment.
The structure of backwardation has reflected the near-term supply tightness, said Jing Xiao, a lead analyst at broker SDIC Futures.
Backwardation is a market structure where immediate deliveries command a premium over later deliveries.
"Once the production was shut down, it would take at least half a year to restart operations, indicating a prolonged absence of supply in the Middle East," said SDIC's Xiao.
Additionally, investors are awaiting a raft of U.S. economic data including the consumer price index this week to gauge the outlook for the Federal Reserve's policy.
Among other SHFE metals, copper SCFcv1 advanced 0.36%, nickel SNIcv1 fell 0.95%, lead SPBcv1 dipped 0.27%, tin SSNcv1 lost 0.7%, and zinc SZNcv1 was flat.
For other LME metals, copper CMCU3 dipped 0.2%, nickel CMNI3 shed 0.22%, lead CMPB3 ticked down 0.1%, tin CMSN3 slid 1.01%, and zinc CMZN3 was little changed.
($1 = 6.8667 Chinese yuan)
