SINGAPORE — Aluminum prices outperformed copper on Monday, with the most-traded contracts on the London and Shanghai exchanges surging, as US strikes on Iranian military sites drove up energy prices — a key cost factor for the energy-intensive metal.
The LME three-month aluminum contract rose as much as 3.3 percent to $2,634.5 per metric ton, before easing to $2,580.50, up 1.22 percent. Meanwhile, the SHFE most-traded aluminum contract was up 0.54 percent at 20,525 yuan ($2,859.23) a ton.
In comparison, LME copper gained 0.16 percent to $9,648.5, and SHFE copper was up 0.31 percent at 78,420 yuan.
“Aluminum is more energy-price sensitive, so it has reacted more strongly to oil prices, and now the key is whether Iran will shut down the Strait of Hormuz,” a Beijing-based metals analyst from a futures company said, requesting anonymity.
The Strait of Hormuz is crucial for bauxite and alumina shipments in the Middle East, and power accounts for 40 percent of the total cost in aluminum smelting, he said.
US President Donald Trump on Sunday raised the question of regime change in Iran following US strikes against key military sites over the weekend, as senior officials in his administration warned Tehran against retaliation.
Brent crude futures were up 2.44 percent at $78.89 a barrel, the highest since January.
LME zinc contract gained 0.5 percent to $2,643 a ton, lead inched up 0.1 percent to $1,994.5, and tin dipped 0.1 percent to $32,650.
SHFE tin gained 1.2 percent to 263,950 yuan a ton, lead gained 0.4 percent to 16,925 yuan, and zinc went up 0.3 percent to 21,980 yuan.
