(Updates prices, adds comment, changes dateline to London)
By Polina Devitt
LONDON, Aug 11 (Reuters) - Aluminium prices climbed to a
seven-week high on Tuesday as concerns over supply from the Gulf
coincided with Norsk Hydro's ( NHYKF ) announcement of reduced feedstock
production at its Brazilian plant.
Benchmark three-month aluminium on the London Metal
Exchange was up 1.9% to $3,378.50 a metric ton at 0850 GMT,
after hitting $3,382.5, its highest since June 22.
Aluminium extended its gains to a seventh consecutive
session after Norsk Hydro ( NHYKF ) said its Alunorte plant in
Brazil had cut alumina output to 50% of capacity due to reduced
supply of natural gas. The plant has annual production capacity
of 6.3 million tons of alumina.
Aluminium is up 6% so far in August, having broken above its
200-day moving average last week, which now provides support at
$3,219. The next resistance level is the 100-day moving average
at $3,396.
"Aluminium had a lot of resistance at $3,200. Once it got
through there, it was only a matter of time until it started to
trend higher," said a metals trader. "Any bullish headline just
acts as a catalyst and adds fuel to the fire."
Providing further support are worries about supply from Gulf
producers and rising oil prices as negotiations between the
United States and Iran over a peace deal and the reopening of
the Strait of Hormuz hit an impasse.
The U.S.-Iran war has disrupted aluminium shipments from
producers in the Middle East, which account for 9% of global
capacity.
Meanwhile, available aluminium stocks in LME-registered
warehouses are at 244,550 tons, the lowest since April 2025,
dominated by Russian-made metal, which many traders avoid.
In other LME metals, copper rose 0.3% to $14,195,
having closed on Monday at an all-time high of $14,160 as
outflows to the U.S. ahead of potential U.S. import tariffs
reduced availability.
The cash-to-three-month spread on the LME remains
in sharp backwardation at $145.5 a ton, signalling tightness for
nearby supply.
LME zinc fell 0.3% to $3,723.50, while tin
gained 0.4% to $55,750. Lead and nickel added
0.1% to $1,904 and $16,925, respectively.