London metals index at record high on aluminium ‘black hole’ fear
Published Fri, Apr 17, 2026 · 12:05 PM
INDUSTRIAL metals jumped to a record high on the London Metal Exchange (LME), driven by gains in aluminium after the Middle East war disrupted supplies, as well as a recent revival in copper.
An LME Index, which tracks six major metals, has rallied by almost 12 per cent over the past four weeks and was at an all-time peak on the close on Thursday (Apr 16). Aluminium has risen about 15 per cent since the start of the Iran war, with around 9 per cent of global output coming from the Middle East.
Aluminium has the biggest weighting on the LME gauge and, together with copper, the two metals make up almost three-quarters of the index.
JPMorgan Chase has warned the aluminium industry was heading towards a “black hole” as a serious, prolonged supply deficit is hitting the market after supply losses escalated dramatically in the wake of Iranian strikes directly targeting two key smelters in Abu Dhabi and Bahrain at the end of last month. A double blockade of the Strait of Hormuz – by the US and Iran – is also keeping shipments stranded.
But while the waterway remains closed, hopes that a ceasefire between the US and Iran will be extended and signs the two sides may be moving closer to a peace deal have aided other metals. They were hit by soaring energy costs and fears of slowing global growth due to the war, but have recovered in recent weeks on signs the conflict might be winding down.
US President Donald Trump claimed on Thursday, without evidence, that Iran had agreed to terms it has long resisted, including giving up ambitions for a nuclear weapon. Teheran has not confirmed it’s made concessions.
Mercuria Energy Group and BMO Capital Markets forecast this week that copper would surpass a record high hit in January. They cited Chinese buyers coming back to the market and a looming decision on tariffs from the White House that’s encouraging more shipments to the US. Copper has rallied 11 per cent in the last four weeks, and is around 3 per cent off its all-time closing price peak.
The LMEX Metals Index was up 3.6 per cent this week to Thursday. Most metals were down on Friday. Aluminium fell 0.4 per cent to US$3,629.50 a tonne as of 10.56 am in Shanghai. Copper dipped 0.3 per cent, while nickel rose 2.1 per cent. BLOOMBERG
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