Supply disruptions increase costs, Rio Tinto plc Sponsored ADR (RIO.US) and Century Aluminum Company (CENX.US) significantly raise premiums for aluminum products.

Against the backdrop of disruptions in the global supply chain due to conflicts in the Middle East, aluminum prices in the United States continue to be under pressure. Sources say that Rio Tinto plc Sponsored ADR (RIO.US) and Century Aluminum Company (CENX.US) have recently raised the premiums for key semi-finished aluminum products by about 12%. Specifically, the two companies have increased the premium for aluminum ingots by about 3 cents per pound (about $110 per ton), significantly higher than before the conflict. At the same time, Rio Tinto plc Sponsored ADR is also pushing clients to accept multi-year contracts with higher prices. Both companies have not commented on this. Analysts point out that this round of price increases reflects the continued impact of the Middle East situation on the flow of commodities. The Persian Gulf region accounts for nearly one-fifth of U.S. aluminum imports, and the current supply disruptions are forcing U.S. buyers to turn to the more expensive domestic market, which already has tight supply. In this context, the rise in aluminum prices further burdens downstream companies and end consumers. Earlier, the U.S. government imposed a tariff of up to 50% on imported aluminum, keeping U.S. aluminum prices long above global levels. Now, in addition to supply disruptions, price pressures are further intensified. Industry insiders point out that producers are taking advantage of the window of restricted supply in the Middle East to improve their pricing power. Charles Johnson, head of the Alcoa Corporation association, said that the situation in the Gulf region continues to affect the global aluminum market, and companies have to adjust their supply chains, transportation routes, and even metal sources to deal with the uncertainty. Data shows that since the outbreak of the conflict in Iran at the end of February, aluminum prices have risen by more than 10%. Premiums in the U.S. Midwest have reached a historical high of $1.1325 per pound. However, with the market warming up to expectations of easing tensions, prices have seen a short-term decline. On Wednesday, aluminum futures on the London Metal Exchange fell by about 1%, to $3,443 per ton, after news that the U.S. and Iran had reached a two-week ceasefire agreement and a pledge to reopen the Strait of Hormuz.