Rio Tinto halts Japan aluminum premium negotiations on geopolitical risks

The decision was linked to heightened volatility in aluminum prices triggered by escalating regional tensions, the reports said. Rio Tinto has not publicly commented on the matter or indicated when talks may resume.

The premiums refer to the additional amount buyers agree to pay on top of the cash price on the London Metal Exchange (LME) for physical aluminum deliveries, Mysteel Global learned. Japan, one of Asia's largest aluminum importers, sets a quarterly benchmark known as the Japan premium for primary aluminum shipments to its main ports.

On March 2, the LME three-month aluminum contract closed at $3,194.5/tonne, up 1.74% from the previous trading day, the LME data showed.

The strengthening of aluminum futures prices followed the air strikes carried out by the U.S. and Israel against Iran on February 28. Concerns intensified further after Iran closed the Strait of Hormuz and launched strikes on U.S. military bases across several Middle Eastern countries, including Bahrain, Kuwait, the United Arab Emirates, Qatar and Saudi Arabia.

Any prolonged disruption in the region, particularly from the sustained closure of the Strait of Hormuz, could affect global aluminum supply, according to market analysts. The Middle East is a major production hub for primary aluminum, and its supply chains could face disruptions if exports of the metal or imports of key smelting raw materials are interrupted.

Primary aluminum output from the five Gulf Cooperation Council countries – namely Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates – reached 6.2 million tonnes in 2025, accounting for 8.3% of global production, data from the International Aluminium Institute showed.

Rio Tinto has aluminum operations in Australia, Canada, Iceland, New Zealand, and Oman, with nearly half of its global output concentrated in Quebec, Canada, according to information on its official website.

Written by Iris Pang, pangjunyu@mysteel.com