METALS-Aluminium falls after Iran declares Strait of Hormuz open

By Polina Devitt

LONDON, April 17 (Reuters) - Aluminium prices fell on Friday after Iran's foreign minister said that passage for all commercial vessels through the Strait of Hormuz was open for the remaining period of ceasefire.

Benchmark three-month aluminium CMAL3 on the London Metal Exchange was down 2.6% at $3,549 a metric ton by 1601 GMT.

The reopening of the Strait of Hormuz, where navigation has been largely suspended since U.S.-Israeli attacks on Iran began on February 28, improves prospects for aluminium exports from the Gulf region, which typically account for around 9% of global supply.

Producers in the region use the Strait to ship the bulk of their metal to world markets and import alumina, a raw material.

There was still some caution, however, with the Norwegian Shipowners' Association saying the presence of sea mines, Iranian conditions and practical implementation must be assessed before any transit.

"Once the dust settles we are still left with disruptions that for a shorter or longer period may keep prices elevated compared to where we came from," said Ole Hansen, head of commodity strategy at Saxo Bank.

Aluminium is up 18% so far this year, having hit a four-year high of $3,672 in the previous session amid a looming global supply deficit after one Gulf producer said in April that fully restoring production at its UAE smelters hit by an Iranian attack in late March could take up to a year.

LME copper CMCU3 rose 0.7% to $13,361.50 a ton as the dollar weakened, making dollar-priced metals more attractive for buyers using other currencies. Stocks around the world, which had already been trading around record highs, jumped further after Iran's statement.

Among other LME metals, zinc CMZN3 added 0.2% to $3,429.50 a ton after hitting $3,482 for its highest since January 29. Lead CMPB3 gained 0.6% to $1,963, tin CMSN3 rose 0.7% to $50,355, while nickel fell 0.9% to $18,060.