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Commodities Score 85 Bullish

LME Index Hits Record Peak as Middle East Conflict Tightens Aluminum Supply

Apr 17, 2026 02:58 UTC
LME
Short term

Industrial metals have surged to all-time highs on the London Metal Exchange amid escalating geopolitical tensions. Aluminum prices, in particular, have spiked as war in the Middle East threatens a significant portion of global production.

  • LME Index rallied nearly 12% over the last four weeks
  • Aluminum prices increased by approximately 15% since the start of the Iran war
  • Middle East region accounts for roughly 9% of global aluminum output
  • Copper prices are also experiencing a revival
  • LME Index reached an all-time peak on Thursday close

The London Metal Exchange (LME) Index, which tracks six primary industrial metals, reached an unprecedented peak on Thursday. The rally was primarily driven by sharp gains in aluminum and a recent revival in copper prices, reflecting heightened market anxiety over supply chain stability. The surge is directly linked to the ongoing conflict in the Middle East, which has sparked fears of a supply 'black hole' for aluminum. With approximately 9% of the world's aluminum output originating from the region, traders are pricing in significant disruption risks as the war involving Iran persists. Quantitative data highlights the intensity of the move; the LME Index has climbed nearly 12% over the past four weeks. Aluminum has outperformed the broader basket, gaining roughly 15% since the onset of the conflict. This price action suggests a growing geopolitical risk premium being baked into industrial commodities. As supply constraints mount, the record-high index indicates that market participants expect prolonged volatility and potential shortages in critical materials essential for global manufacturing.

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