Financial News Agency, March 2 (Editor Zhao Hao) The latest news shows that after the United States and Israel launched military strikes on Iran, global mining giant Rio Tinto Group suspended negotiations with Japanese customers on aluminum supply costs for the second quarter on the grounds that the situation in this key production area in the Middle East continues to escalate.
According to people familiar with the matter, Rio Tinto Group has withdrawn its previous premium offer of US$250 per ton. People familiar with the matter said Rio Tinto considered the impact of the conflict in the Middle East on metal prices to be the reason for the adjustment in its offer.
East Asia is an important downstream consumer market for aluminum in the world. As a major importing country, Platts' "Aluminum Japan Premium" ("MJP") is regarded as an important benchmark indicator reflecting demand in East Asia.
Rio Tinto initially offered a premium of $250 per ton, the highest level since at least 2015, people familiar with the matter said.
Last weekend, the United States and Israel jointly launched a "pre-emptive" military strike against Iran, and Iran immediately retaliated. Many countries in the Middle East, including the United Arab Emirates, Qatar, Bahrain, and Iraq, were affected by the conflict.
It is understood that Emirates Global Aluminum (EGA), the largest aluminum producer in the UAE, has smelters in Dubai and Abu Dhabi, while Bahrain Aluminum Company (Alba) operates one of the largest single smelters in the world.
Data show that the region accounts for about 9% of global aluminum production capacity, and major aluminum producers need to transport bauxite in and out of metal through the Strait of Hormuz.
Earlier in the day, the Dubai Media Office posted on social media that fragments of an interceptor bomb fell into the local Alishan Port, causing a fire at a berth in the port – the berth is only a few kilometers away from the Emirates Global Aluminum Company's factory.
In late January this year, Lun aluminum prices soared to their highest level since 2022. The U.S. Midwest aluminum premium, a key benchmark, hit a record high last month, exceeding $1 per pound.
(Zhao Hao, Financial Associated Press)
