Aluminum prices on the London Metal Exchange strengthened on the 8th, influenced by escalating conflict in the Middle East. The recent round of US strikes on targets within Iran has raised concerns about the sustainability of a fragile ceasefire outlook, bringing geopolitical risk premiums back into pricing considerations.

As of 0700 GMT, the three-month aluminum contract on the LME was trading at $3,148 per tonne, up 0.33%. The primary aluminum contract on the Shanghai Futures Exchange also moved higher, closing at 23,075 yuan per tonne, a gain of 0.68%. Concurrently, reports of ship attacks in the direction of the Strait of Hormuz have further heightened market concerns regarding the recovery of supply from the region, which accounts for approximately 9% of global aluminum smelting capacity.

In June of this year, aluminum prices plummeted 16% for the month, marking the largest monthly decline since the 2008 global financial crisis, as progress in US-Iran talks led the market to completely price out geopolitical risk premiums. Analysis from ING notes that the aluminum market is still expected to maintain a supply deficit for the full year, and recent price pullbacks have attracted buying interest from within China, providing a degree of underlying support for aluminum prices.

In other base metals, copper prices edged lower on the 8th as the market awaited the release of the Federal Reserve's minutes from its June policy meeting, hoping to find more clues about the interest rate path. Previously, persistent concerns about the Fed maintaining higher interest rates for longer have continued to weigh on copper prices. As the world's largest copper consumer, China's recent copper purchases have remained robust. The Yangshan copper premium, a gauge of spot buying interest, rose to $80 per tonne on the 7th, reaching a 13-month high.

Other LME metals showed mixed performance: zinc fell 0.34%, lead gained 0.64%, nickel declined 0.72%, and tin dropped 0.3%. On the Shanghai Futures Exchange, zinc fell 0.14%, lead rose 1.1%, nickel decreased 0.98%, and tin increased 0.55%.