METALS-Aluminium extends gains on deepening Middle East supply fears

March 3 (Reuters) - Aluminium extended gains on Tuesday as fresh Middle East tensions, including Iran's effective closure of the Strait of Hormuz, fuelled shipment uncertainty and heightened supply-risk concerns.

The most-active aluminium on the Shanghai Futures Exchange rose 1.37% to 24,375 yuan ($3,542.77) a metric ton as of 0255 GMT.

The benchmark three-month copper on the London Metal Exchange gained 1.05% to $3,228 a ton. An Iranian Revolutionary Guards official said on Monday that the Strait of Hormuz was closed and vowed to attack any ship trying to pass. The fresh disruption came as aluminium already hit a one-month high on Monday, following the joint U.S. and Israeli strikes on Iran. Analysts at Goldman Sachs said in a Monday note that the market is already trading above fair value, but prices could continue to rise substantially if disruptions persist for a month.

The bank noted that it sees substantial upside to European aluminium premiums. Most of the aluminium produced in the region is exported to the United States and Europe.

More broadly, base metals showed mixed movements amid mounting inflation fears stemming from rising oil and gas prices, amid ongoing conflicts in the Middle East.

A much stronger U.S. dollar also put pressure on the complex, as it makes commodities denominated by the greenback less affordable for investors using other currencies.

Tin led the decline. The most-active tin on SHFE plunged 7.49% to 415,120 yuan a ton, while the benchmark three-month tin in London declined 2% to $52,610 a ton.

The soldering metal's recent rally was halted as the tin-rich autonomous Wa State in Myanmar is stepping up efforts to resume production at some of its tin mines, and export of tin concentrates to China is expected to rise throughout 2026, easing a supply fear that underpinned the rally, according to analysts at Chinese broker Galaxy Futures.

Copper saw divergence between the Shanghai market and the London benchmark.

The Shanghai most-active copper declined 0.99% to 102,530 yuan a ton, and the London benchmark copper rose 0.91% to $13,228 a ton.

Among other base metals on SHFE, zinc nudged 0.06% lower, nickel tumbled 0.79%, and lead rose 0.33%.

Elsewhere on the LME, Zinc added 0.71%, lead rose 0.54% and nickel gained 2.59%.

DATA/EVENTS

1000 EU HCIP Flash YY Feb

1000 EU HCIP-X F, E, A, T Flash MM, YY Feb

($1 = 6.8802 Chinese yuan renminbi) (Reporting by Lewis Jackson and Dylan Duan; Editing by Rashmi Aich)