METALS-Aluminium dips as dollar strengthens on widening Middle East war

March 3 (Reuters) - Aluminium pared earlier gains to close lower on Tuesday, pressured by a stronger dollar as the U.S. and Israeli air war ⁠against ​Iran dragged on for the fourth day, widening the Gulf region into the conflict.

The most-active aluminium SAFcv1 closed daytime trading 0.58% lower at 23,905 yuan ($3,468.36) a metric ton, having risen 2.31% to 24,600 yuan earlier.

The metal, which had hit a one-month high on Monday, gained earlier in the session as Iran's closure of the Strait of Hormuz led to worries over supply being hit.

Global aluminium producers have paused initial premium offers to Japanese buyers as they gauge the impact of the escalating Middle East conflict.

Analysts at Goldman Sachs said in a Monday note that the market is already trading above fair value, but prices could continue to rise substantially if disruptions persist for a month.

The benchmark three-month copper CMAL3 on the London Metal Exchange dipped, down 0.42% to $3,181 a ton as of 0726 GMT, after rising 1.1% earlier.

More broadly, a stronger dollar is pressuring the base metal complex, amid mounting inflation fears stemming from rising oil and gas prices. O/R

Tin led the decline. The most-active tin on SHFE SSNcv1 plunged 12% to 394,890 yuan a ton, touching the maximum-allowed fall. The London benchmark tin CMSN3 declined 6.18% to $50,365 a ton.

A stronger U.S. dollar makes commodities denominated by the greenback less affordable for investors using other currencies.

The soldering metal's recent rally was halted as the tin-rich autonomous Wa State in Myanmar is stepping up efforts to resume production at some of its mines, and export of tin concentrates to China is expected to rise throughout 2026, easing a supply fear that underpinned the rally, according to analysts at Chinese broker Galaxy Futures.

Among other base metals on SHFE, copper SCFcv1 declined 1.40%, zinc SZNcv1 dropped 0.89%, nickel SNIcv1 lost 3.16% and lead SPBcv1 nudged 0.03% higher.

Elsewhere on the LME, copper CMCU3 added 0.14%, lead CMPB3 was up 0.15%, nickel CMNI3 rose 0.41% and zinc CMZN3 dropped 0.45%.

($1 = 6.8923 Chinese yuan renminbi)