Strait of Hormuz disruptions and Iran tensions are driving up aluminum prices and premiums. Aluminium Bahrain and Qatalum have cut output, while feedstock is tight. Rerouting via Port of Sohar or Saudi ports raises costs and delays. Buyers are turning to China, India, Russia, Canada, and scrap to offset risk. Prolonged disruption could reduce Middle East market share and reprice it as higher-risk supply.

SMM Nickel News, March 24: Macro and Market News: (1) Iran’s Parliament Speaker Qalibaf denied having held talks with the US side and accused fake news of manipulating the financial and oil markets; Iran’s Islamic Revolutionary Guard Corps said it would launch new attacks on US targets and called Trump’s remarks “psychological warfare” (2) Israeli officials said Washington had set April 9 as the target date for ending the war. Talks between Iran and the US were expected to be held later this week in Pakistan, adding that Washington had not yet informed Israel of any contact with Iran’s Parliament Speaker Qalibaf. Spot Market: On March 24, the SMM price of #1 refined nickel fell 1,700 yuan/mt from the previous trading day. In spot premiums, Jinchuan #1 refined nickel averaged 6,250 yuan/mt, down 300 yuan/mt from the previous trading day; China’s mainstream brands of electrodeposited nickel were at -300-400 yuan/mt. Futures Market: After surging sharply in the night session, the most-traded SHFE nickel 2605 contract pulled back in the morning session, closing the morning session at 132,830 yuan/mt, up 0.69%. Current nickel prices were in a stage of intense tug-of-war between macro headwinds and supply risks. Short term, tighter Indonesian RKAB quotas, continued gains in ore prices, and the risk of sulfur supply disruptions provided solid support below, but high inventory and the slow recovery in end-use demand still capped upside room. The core trading range of the most-traded SHFE nickel contract was expected at 130,000-140,000 yuan/mt in the short term.

SMM Nickel News, March 23: Macro and market news: (1) Trump demanded that Iran reopen the Strait of Hormuz within 48 hours, or its power stations would be destroyed. Iran's Islamic Revolutionary Guard Corps responded that if Trump's threat to attack Iranian power stations were carried out, Iran would immediately take four measures, including fully closing the Strait of Hormuz. (2) Pan Gongsheng, Governor of the People's Bank of China, said at the China Development Forum 2026 Annual Conference on March 22 that China would continue to implement a moderately accommodative monetary policy. A range of monetary policy tools, including the reserve requirement ratio (RRR), policy interest rates, and open market operations, would be used in a comprehensive manner to maintain ample liquidity. Spot market: On March 23, the SMM price of #1 refined nickel fell by 50 yuan/mt from the previous trading day. Spot premiums, the average premium for Jinchuan #1 refined nickel was 6,550 yuan/mt, unchanged from the previous trading day; the mainstream China electrodeposited nickel brands were at -300-400 yuan/mt. Futures market: The most-traded SHFE nickel contract (2605) fluctuated at highs during the session and closed the morning session at 134,810 yuan/mt, up 1.28%. Nickel prices are currently in a phase of intense tug-of-war between macro headwinds and supply risks. Short term, tighter Indonesian RKAB quotas, continued increases in ore prices, and the risk of sulfur supply disruptions have formed a solid bottom, but high inventory and the slow recovery in end-use demand still capped upside room. The core trading range of the most-traded SHFE nickel contract is expected at 130,000-140,000 yuan/mt in the short term.

Trump demanded that Iran reopen the Strait of Hormuz within 48 hours, or its power plants would be destroyed. The Islamic Revolutionary Guard Corps of Iran retorted that if Trump carried out his threat to attack Iran's power stations, Iran would immediately take four measures, including the complete closure of the Strait of Hormuz.

March 22, according to the report of the Iranian media on the 22nd, the Iranian Islamic Revolutionary Guard said on the same day that if the threat of US President Trump to attack the Iranian power station is carried out, Iran will immediately take four measures, including completely closing the Strait of Hormuz, attacking all Israeli power plants, energy and information technology facilities, completely destroying all US-held companies in the Middle East, and attacking power plants in Middle Eastern countries with US military bases.

SMM Morning Meeting Summary: Overnight, LME copper opened at $12,093.5/mt. Early in the session, the center of copper prices gradually moved lower and fell to $11,754/mt, then fluctuated upward to a high of $12,228.5/mt, before seeing wide swings and finally closing at $12,211.5/mt, down 1.05%. Trading volume reached 46,900 lots, open interest stood at 288,600 lots, an increase of 239 lots from the previous trading day. Overnight, the most-traded SHFE copper 2605 contract opened at 92,500 yuan/mt and fell to 91,820 yuan/mt early in the session. The center of copper prices then fluctuated upward to a high of 95,530 yuan/mt, before fluctuating rangebound and finally closing at 94,920 yuan/mt, down 0.91%. Trading volume reached 153,000 lots, open interest stood at 197,000 lots, down 6,302 lots from the previous trading day, mainly due to long liquidation.

Today, the most-traded BC copper 2604 contract opened at 86,640 yuan/mt and immediately hit a session high of 86,640 yuan/mt. After the opening, its center kept moving lower, and it touched a session low of 82,930 yuan/mt near the close, before finally settling at 83,380 yuan/mt, down 4.59%. Open interest reached 5,565 lots, up 133 lots from the previous trading day, while trading volume came in at 7,286 lots, up 2,262 lots from the previous trading day, mainly reflecting increased short positions by bears. On the macro front, the US Fed kept interest rates unchanged, while the dot plot turned hawkish. The market expected that a Fed interest rate cut remained a distant prospect, putting copper prices under pressure. In addition, tensions in the Middle East continued to escalate, with Israel killing Iran’s intelligence minister and striking targets in northern Iran, while Iran retaliated by attacking energy facilities in Qatar and Saudi Arabia. The geopolitical conflict pushed up oil prices, intensified inflation risks, and drove the US dollar index higher, all of which were bearish for copper prices. On the fundamentals front, arrivals of both imported and domestic cargoes remained stable, with overall supply ample. Demand side, affected by the pullback in copper prices, downstream purchase willingness continued to rebound. Inventory side, as of Thursday, March 19, SMM copper inventories in major regions across China fell 8.85% WoW from the previous Thursday, while total inventory increased 176,700 mt YoY, with destocking seen across all regions. The SHFE copper 2604 contract closed at 94,430 yuan/mt. Based on the BC copper 2604 contract price of 83,380 yuan/mt, its after-tax price was 94,219 yuan/mt. The price spread between the SHFE copper 2604 contract and BC copper was 211 yuan/mt, and the spread remained in contango structure, narrowing from the previous day.

SMM Morning Meeting Summary: Overnight, LME copper opened at $12,714.5/mt and climbed to $12,715/mt at the start of the session. Copper prices then saw the center move straight downward, before fluctuating rangebound and eventually closing at $12,340/mt, down 3.44%. Trading volume reached 33,600 lots, and open interest stood at 288,300 lots, down 4,872 lots from the previous trading day, mainly due to long position liquidation. Overnight, the most-traded SHFE copper 2605 contract opened at and touched a high of 98,000 yuan/mt, after which the center of copper prices moved straight downward to a low of 95,920 yuan/mt, then fluctuated upward and finally closed at 96,340 yuan/mt, down 2.58%. Trading volume reached 103,000 lots, and open interest stood at 198,000 lots, up 9,911 lots from the previous trading day, mainly due to increased short positions.

[SMM Morning Meeting Summary: The US Fed Held Rates Unchanged, and LME Zinc Came Under Pressure] Overnight, LME zinc opened at $3,220.5/mt. In early trading, LME zinc briefly rose to a high of $3,227/mt, after which bulls reduced their positions, and LME zinc fluctuated downward throughout the session, hitting a low of $3,130/mt near the close. It finally closed down at $3,132.5/mt, a decrease of $100.5/mt, or 3.11%. Trading volume increased to 16,556 lots, and open interest fell by 6,295 lots to 208,000 lots.

Iran’s threat to drive oil prices up to $200 a barrel may sound like hyperbole, but as the energy crisis persisted, that outcome already looked more likely than US President Trump’s prediction that oil prices would soon pull back to pre-war levels… The conflict involving Israel and the US against Iran entered its third week — and escalated into one spanning the entire Middle East — yet the global oil benchmark’s response so far was surprisingly “mediocre.” Brent crude oil was currently trading near $100 a barrel, up about 65 from the start of the year. Although that level would have been unimaginable just a few weeks ago, it still remained below last Monday’s brief peak of nearly $120. Given that since the conflict began, the effective closure of the Strait of Hormuz had trapped about one-fifth of global oil supply — roughly 20 million barrels a day — crude oil prices should, in theory, have been much higher. That seemed to suggest investors still retained a degree of trust in Trump , betting that the crisis would be resolved quickly and that the Strait of Hormuz would soon reopen — whether it was called the “Trump put,” the “TACO trade,” or “buy Trump,” many oil traders appeared to be wagering that the president would ultimately be able to limit the market damage. “When this is over, oil prices will come down very, very quickly,” Trump said on Monday this week. Yet that optimism looked increasingly difficult to reconcile with realities on the ground — whether on a battlefield where the conflict was intensifying, or in the physical oil market, where supply bottlenecks were steadily spreading. Signals Being Overlooked In fact, the physical crude oil market was sending an increasing number of stress signals, even though the international benchmark “paper oil” market had so far largely ignored them. Although trade had stalled under the impact of the Iran conflict, Middle Eastern crude benchmarks still surged to record highs, making them the most expensive crude in the world. The spike in these benchmark indicators, which are used to price millions of barrels of Middle Eastern crude sold to Asia, was raising costs for Asian refiners and forcing them to seek alternatives or make further production cuts in the coming months. S&P Global Platts said Dubai spot crude assessments for May-loading cargoes hit a record $157.66 a barrel on Tuesday, surpassing the previous all-time high of $147.5 set by Brent crude oil futures in 2008. That left Dubai crude’s premium to swaps at $60.82 a barrel, compared with an average premium of just 90¢ in February. Meanwhile, Oman crude oil futures hit a record high of $152.58 per barrel on Tuesday, with its premium to the Dubai swap set at $55.74 per barrel, versus an average premium of just 75¢ in February. Oman crude oil is exported from a terminal outside the Strait of Hormuz. This surge reflected massive uncertainty over actually available supply in the Middle East after Iran repeatedly attacked Oman's oil terminal and the UAE's major oil export terminal of Fujairah outside the Strait of Hormuz. Are Brent and WTI Failing to Reflect the "True Severity" of the Oil Market? As JPMorgan's head of commodities, Natasha Kaneva, pointed out in her latest research note on Tuesday , there was a clear mismatch between international benchmark crude pricing and the Middle Eastern geography of the supply disruptions. The core issue was that Brent and WTI are benchmark indicators at opposite ends of the Atlantic basin, while the current shock is concentrated in the Middle East. As a result, these benchmark crude prices were particularly influenced by relatively loose regional fundamentals—commercial oil inventory in both the US and Europe were ample in early 2026, and supply across the Atlantic basin was also relatively abundant in the short term. In addition, expectations for a release from the US Strategic Petroleum Reserve (SPR)—as well as a partial release that will soon materialize—further eased prompt tightness in Brent- and WTI-linked markets. By contrast, Middle Eastern crude benchmarks such as Dubai and Oman more accurately reflected the current dislocation in the physical market. Dubai and Oman spot prices were both trading above $150 per barrel, underscoring the severity of crude oil shortages originating in the Gulf region. These Middle Eastern oil prices were directly affected by export disruptions and therefore more effectively reflected marginal supply deficits than Atlantic-linked crude prices. Crucially, trade geography intensified this dynamic. Most of the crude transported via the Strait of Hormuz goes to Asia—before the outbreak of the Middle East conflict, about 11.2 million barrels of crude and 1.4 million barrels of refined products flowed through the strait to Asia each day. As a result, the direct physical shortage—and the surge in oil prices—was concentrated in Asian markets most dependent on Gulf crude. In fact, early signs of demand destruction had already emerged in Asia as product prices surged and spot crude became prohibitively expensive. JPMorgan noted that timing effects further reinforced this divergence. A typical voyage from Gulf Cooperation Council (GCC) countries to Asia takes about 10 to 15 days, while cargoes bound for Europe via the Suez Canal require nearly 25 to 30 days, or 35 to 45 days if rerouted around the Cape of Good Hope. Therefore, the impact of disrupted Gulf flows would hit Asian markets sooner and more severely, while Atlantic Basin benchmarks such as Brent and WTI would enjoy a longer buffer because of surplus inventory and slower supply adjustments. The US, with crude oil production exceeding 13 million barrels per day, would be affected the least. JPMorgan believed that, in this context, the apparent price stability shown by Brent and WTI should not be taken as evidence of adequate global supply. It reflected a temporary buffer created by regional surplus inventory, benchmark composition, and policy intervention. In fact, for refiners, especially those in Asia, the current crude oil shortage had already become a serious problem. About 60% of the region’s crude oil imports depended on the Middle East, and the difficulty of finding alternative, timely supplies was rapidly becoming acute. The pressure had already forced many countries into painful adjustments. Refiners across Asia had begun cutting run rates to conserve dwindling inventory. Some countries had banned exports of refined products, a defensive move that could further tighten the global market. As the crude oil shortage worsened, refined product prices surged. Asian jet fuel prices were approaching $200 a barrel, near the record high of about $220 reached earlier this month. The Crisis Could Spread Further Ultimately, this crisis was expected to extend beyond Asia. Data from analytics firm Kpler showed that Europe accounted for about three-quarters of Middle Eastern jet fuel exports shipped through the Strait of Hormuz last year—about 379,000 barrels per day—but since the conflict began, no such cargoes had passed through the strait. Unsurprisingly, jet fuel barge prices in the Amsterdam-Rotterdam-Antwerp refining hub had surged to a record $190 a barrel, exceeding the previous peak set after the Russia-Ukraine conflict in February 2022. The comparison with the Russia-Ukraine crisis may be even more compelling. Before the outbreak of the Russia-Ukraine conflict in 2022, Russia supplied about 30% of Europe’s crude oil imports and one-third of its refined product imports. As traders feared Europe would lose supplies from one of the world’s largest oil producers, Brent crude rose to $130 a barrel after the Russia-Ukraine conflict—even though that worst-case scenario never fully materialized in the end. By contrast, according to Morgan Stanley, the physical disruption caused by the Iran conflict had already exceeded that level of concern by more than threefold. Even if the Strait of Hormuz were to reopen immediately, it would not bring immediate relief. According to the International Energy Agency, about 10 million barrels per day of production in the Middle East has been shut in since the conflict began. Restoring these flows will take weeks, if not months. To be sure, the oil market entered the Iran conflict in a relatively loose state, and the International Energy Agency had projected that global supply would exceed demand by about 3.7 million barrels per day. But that surplus has now been erased by the current turmoil. Last week, the International Energy Agency announced plans to release a record 400 million barrels from member countries' strategic petroleum reserves, which will help cushion the initial shock. But drawing down inventories cannot substitute for deliveries of new oil. In other words, the supply shock to the oil market is real and may persist. Once the Strait of Hormuz finally reopens, oil prices could initially plunge in a relief rebound, but given the harsh realities of the physical market, traders may need to think twice before betting that the return to normalcy promised by Trump is about to arrive…