Under the backdrop of the Iran war, one of the "barometers" of aluminum prices has shifted to a bullish outlook: Rio Tinto plc sponsored ADR (RIO.US) has halted negotiations with Japan on aluminum supply after initially offering high prices.

Rio Tinto plc Sponsored ADR (RIO.US) has suspended negotiations with Japanese customers on aluminum supply in the second quarter, citing escalated hostilities in the key production region following attacks on Iran by the United States and Israel. According to sources, Rio Tinto plc Sponsored ADR (one of the world's largest aluminum suppliers with smelters in Canada and Australia) has withdrawn the previously proposed premium of $250 per ton. Sources say that Rio Tinto plc Sponsored ADR stated that the impact of the Middle East conflict on metal prices was the reason for the change in pricing. Japan is a major importer of aluminum, and the Japan Premium (MJP) is seen as a benchmark reflecting demand in East Asia (a major downstream market). According to two sources, the initial $250 per ton premium proposed by Rio Tinto plc Sponsored ADR is at least the highest level since 2015. Over the weekend, the United States and Israel launched attacks on Iran, leading to further tensions in the Middle East, with Iran retaliating against multiple neighboring countries. According to data from consulting firm AZ China Ltd., this region accounts for approximately 9% of global aluminum capacity, and aluminum prices have historically been very sensitive to political turmoil in the region. Li Xuezhi, director of the Chaos Ternary Futures Research Institute, stated that potential disruptions in the supply flow of alumina or aluminum ore needed by Middle Eastern aluminum smelters would pose a "very significant risk." He believes that aluminum prices are likely to continue to rise. Some Middle Eastern aluminum products are shipped to the United States, and due to President Trump's tariff measures, aluminum prices in the United States have exceeded global benchmark levels in recent months. This versatile lightweight metal used in a wide range of products, from aircraft to soda cans, saw a 3.6% increase on Monday at the London Metal Exchange, reaching $3,254 per ton. Data from Fastmarkets shows that metal premiums in the Midwestern United States, the extra charge above global benchmark prices when delivering metal to that region, reached a historical high last month. Since June, when Trump raised metal tariffs to 50%, this premium has more than doubled. Analysts from Citigroup, including Wenyu Yao, stated in a report that the aluminum market is currently facing a "macro tug-of-war": on one hand, the Gulf situation threatens to push up regional premiums in Europe and the United States; on the other hand, safe-haven positions and a strong US dollar are creating offsetting pressures.