Aluminum Supply Shock Brings Massive Options Bet Into the Money
Aluminum coils in a cooling area at a manufacturing facility in Alcoa, Tennessee.
Photographer: Luke Sharrett/BloombergA huge aluminum options trade has come into the money this week as the war in Iran sparked a sharp rally in prices, delivering a windfall after the appearance of the position stunned dealers last week.
Aluminum prices have rallied as much as 8.9% this week, hitting a four-year high of $3,418 a ton on Wednesday after Aluminium Bahrain — one of the world’s top producers — suspended sales due to the effective halt of shipping through the Strait of Hormuz. Qatar’s state-owned producer had been forced to stop production a day earlier due to a domestic shortage of gas, and traders have warned of worldwide disruptions to supply unless the vital waterway reopens soon.