(Updates prices, adds analyst comment, changes dateline to
London)
By Polina Devitt
LONDON, May 26 (Reuters) - Aluminium prices hit their
highest in more than four years on Tuesday, as rising prices for
the feedstock alumina added to persistent concerns about a
tightening market amid reduced supply from Gulf producers.
Three-month aluminium on the London Metal Exchange
rose 1.4% to $3,698.50 by 0937 GMT after hitting $3,707.5, the
highest since March 24, 2022.
The metal's record high of $4,073.5 was on March 7, 2022,
when markets were grappling with the immediate fallout of
Russia's invasion of Ukraine.
Providing support to aluminium on Tuesday was a 5% rise in
September alumina futures on the Shanghai Futures Exchange
, which advanced to their highest since early May due to
worries about supplies of raw material bauxite from Guinea.
Guinea, the world's top bauxite producer, has been
considering introducing export quotas for mining companies as
shipping costs climb, squeezing the country's revenue. Guinea
expects to finalise the new policy in June, Bloomberg News
reported citing an official.
These worries added to already reduced supply from producers
in the Gulf amid the Iran war, which has kept the premium of the
LME aluminium cash contract against the benchmark at
$71 a ton last week, indicating tightness for immediate supply.
The Middle East conflict has triggered the largest aluminium
supply shock in at least 50 years, analysts at Citi said in a
note last week, accelerating inventory drawdowns of around 3
million tons this year from already historically low levels and
prompting strong futures buying.
In other LME metals, copper fell 0.3% to $13,617.50
a ton. The global refined copper market was in a surplus of
396,000 tons in January-March, according to an industry body.
Zinc rose 1.3% to $3,588.50, lead gained
0.5% to $2,020, tin added 0.7% to $54,570 and nickel
lost 1.1% to $18,695.
Earlier in the session, LME copper, zinc and tin hit their
highest since mid-May, while lead touched the highest since late
January.
(Reporting by Polina Devitt; Editing by Mrigank Dhaniwala)