METALS-Aluminium rises as Middle East supply worries deepen

March 5 (Reuters) - Aluminium prices rose on Thursday, driven by concerns about supply from the war-torn Middle East after Aluminium Bahrain (Alba) ALBH.BH halted shipments, although a stronger U.S. dollar capped gains.

The most-active aluminium on the Shanghai Futures Exchange SAFcv1 closed daytime trading 1.31% higher at 24,815 yuan ($3,598.72) a metric ton after rising as much as 4.18% earlier in the session to 25,520 yuan.

The benchmark three-month aluminium CMAL3 on the London Metal Exchange also pared gains, up 0.49% at $3,359 a ton, as of 0752 GMT, after rising 1.74% earlier in the day.

Alba, which operates one of the world's biggest aluminium smelters, declared force majeure on Wednesday, halting shipments as shipping through the Strait of Hormuz has ground to a near halt.

Iran had earlier closed the key corridor for commodities from the Middle East, vowing to attack any ship trying to cross the strait in response to the U.S. and Israel joint strike.

The Alba news came after Norsk Hydro's NHY.OL announcement of a controlled shutdown of its aluminium joint venture in Qatar, as well as of a force majeure.

The Gulf region supplied 8% of the world's aluminium last year. Analysts at Citi have raised their three-month LME aluminium price target to $3,600 a ton from $3,400 and said prices could climb to $4,000 in a bull-case scenario, citing the war disruptions in Iran.

"Force majeure has now materialised at two Gulf producers, marking a clear shift from risk to realised disruption," Citi said.

Gains were limited by a stronger dollar =USD, which makes greenback-denominated commodities less affordable for buyers using other currencies.

Other base metals either pared gains or reversed course to trade lower in afternoon trade in China. Shanghai copper SCFcv1 declined 0.16% to 101,080 yuan a ton, while London copper CMCU3 pulled back 0.83% to $12,948.50 a ton.

Investors focused on China's National People's Congress. China set its economic growth target for 2026 at 4.5%-5%, a slight downgrade from the 5% pace achieved last year, showing tolerance for slower growth.

A report from the state planner said capacity would be managed in a slew of industries, including copper smelting and alumina, as the country grapples with overcapacity.

Elsewhere on the SHFE, zinc SZNcv1 ticked 0.06% higher, lead SPBcv1 nudged 0.06% lower, nickel SNIcv1 dipped 0.31% and tin SSNcv1 lost 0.90%.

Among other LME metals, zinc CMZN3 dropped 0.36%, lead CMPB3 lost 0.79%, nickel CMNI3 shed 1.21% and tin CMSN3 slid 2.80%.

($1 = 6.8955 Chinese yuan)