Aluminum prices rose to a four-year high on Thursday, supported by expectations of supply constraints alongside improved demand outlooks should the United States and Iran reach an agreement to reopen the Strait of Hormuz.

The benchmark three-month aluminum price on the London Metal Exchange (LME) rose 0.5% to $3,636.60 per metric ton by 06:47 AM ET (10:47 GMT), its highest level since March 2022.

Similarly, the most-traded aluminum contract on the Shanghai Futures Exchange closed up 2.9% at 25,635 yuan per ton, marking its strongest level since March 9, according to Reuters.

The agency quoted analysts at JPMorgan Chase forecasting a primary aluminum supply deficit of approximately 1.9 million tons this year—the largest since 2000—resulting from an estimated loss of 2.4 million tons of supply from the Middle East.

Aluminum inventories also declined in LME-approved warehouses and across three major Japanese ports, alongside a drop in Chinese stocks, amid growing expectations of increased overseas orders for Chinese aluminum, according to the Reuters report.

In U.S. equity markets, shares of Alcoa rose in pre-market trading, and Century Aluminum shares also climbed.

Politically, reports from the Wall Street Journal indicated that Washington and Tehran have agreed in principle to hold new talks, following an initial round of negotiations held last week in Pakistan that concluded without an immediate agreement. Citing sources familiar with the matter, the journal added that a date or location for the meeting has not yet been set.

A fragile ceasefire between the two sides is scheduled to expire on April 21. Additionally, U.S. President Donald Trump stated that talks between Israel and Lebanon would take place later today without providing further details, while the Associated Press reported that Lebanon was unaware of such talks.

Nevertheless, indicators of tension in the Middle East persist, particularly regarding the ongoing U.S. naval blockade of Iranian ports. A senior Iranian military commander warned the United States against continuing the blockade, while the U.S. Central Command confirms that no commercial vessels or oil tankers linked to Iran have succeeded in breaking it.

Bitcoin rose on Thursday, nearing the $75,000 level, as it extended the strong gains recorded earlier in the week. Improved global risk appetite and growing hopes for a resumption of the diplomatic track between the United States and Iran bolstered demand for the cryptocurrency.

The world’s largest cryptocurrency, Bitcoin, was trading up 1.1% at $74,890 by 09:23 AM ET (13:23 GMT).

Earlier in the week, Bitcoin prices had jumped to a four-week high near $76,000, before trimming some gains due to profit-taking.

Analysts at IG Group noted in a recent memo: "This pattern — rallies followed by quick pullbacks — has become the hallmark of recent trading, reflecting a market capable of generating upward momentum but still struggling to maintain it."

Bitcoin Rises in Tandem with High-Risk Assets

The recent gains in Bitcoin aligned with a broader rally in high-risk assets globally. Wall Street closed at record levels on Wednesday, driven by strong corporate earnings and tech-led gains, while Asian stocks continued their ascent on Thursday.

Investor appetite was fueled by increasing optimism that the United States and Iran might resume negotiations to extend a fragile ceasefire, helping to calm fears of a prolonged conflict.

Reports indicate that diplomatic efforts are ongoing, even as Washington continues its naval blockade of Iranian ports and tensions persist around the Strait of Hormuz.

IG Group analysts added: "Part of the recent strength is linked to improved macroeconomic sentiment and renewed risk appetite. Relatively weaker economic data and stable volatility levels, amid hopes for a lasting ceasefire agreement between the U.S. and Iran, have supported demand for high-risk assets, including cryptocurrencies."

They continued: "A technical breakout above approximately $76,100 would signal a continuation of the upward trend, while failure to do so keeps trading within a range."

Media reports also pointed to continued institutional accumulation and strong flows into crypto markets, though gains remain capped by intermittent profit-taking near recent highs.

Cryptocurrency Prices Today: Limited Gains for Altcoins

Most altcoins also recorded limited gains on Thursday amid a positive risk environment.

Ethereum, the world’s second-largest cryptocurrency, rose 0.8% to $2,344.

Meanwhile, Ripple, the third-largest cryptocurrency, jumped by about 4% to reach $1.422.

Oil prices rose on Thursday, reversing earlier declines as markets grew skeptical of the ability of peace talks between the United States and Iran to reach an agreement ending the war that has disrupted energy supplies from the Middle East.

Brent crude contracts climbed by 67 cents, or 0.7%, to reach $95.60 per barrel at 12:05 GMT. U.S. West Texas Intermediate (WTI) crude contracts also rose by 17 cents, or 0.2%, to $91.46 per barrel.

John Evans, an oil market analyst at PVM, said: "We remain skeptical of any quick resolution to this war. Every headline is met with a counter-headline."

The U.S.-Israeli war on Iran has caused unprecedented disruption in global oil and gas markets, leading to the suspension of navigation through the Strait of Hormuz, through which approximately 20% of the world's oil and liquefied natural gas (LNG) flows normally pass.

Prospects for Resuming Peace Talks

U.S. and Iranian officials were considering returning to Pakistan for a new round of talks as early as the upcoming weekend. The Pakistani army chief also arrived in Tehran on Wednesday acting as a mediator.

A source familiar with the matter in Tehran told Reuters that Iran might consider allowing ships to sail freely through the Omani side of the Strait of Hormuz if an agreement is reached to prevent a renewal of the conflict, following the start of a two-week ceasefire on April 8.

In another sign of potential de-escalation of military actions, the Israeli government held a meeting on Wednesday to discuss the situation in neighboring Lebanon, according to a senior Israeli official, more than six weeks after the outbreak of the war with the Iranian-backed Hezbollah.

Analysts at ING bank estimate that about 13 million barrels per day of oil flows have been disrupted due to the closure of the Strait, after accounting for pipeline diversions and the limited number of tankers that managed to transit.

With the United States announcing a blockade on Iranian ports following the collapse of peace talks over the weekend, these disruptions could worsen, although some tankers under U.S. sanctions have managed to pass.

U.S. Treasury Secretary Scott Bessent stated that Washington will not renew waivers that allowed the purchase of some Iranian and Russian oil.

In a further sign of tight global supplies of oil and its derivatives, U.S. Energy Information Administration data showed that inventories of oil, gasoline, and distillates fell last week, as countries sought to compensate for affected supplies, leading to an increase in exports and a decline in imports.

Significant disagreements remain between the United States and Iran despite some progress in talks, according to an Iranian official who stated on Thursday that divisions persist, particularly regarding Tehran's nuclear ambitions, which contributed to cooling market optimism.

The euro briefly rose above the $1.18 level after eight consecutive sessions of gains, but later retreated by 0.1% to settle below that mark.

Meanwhile, the British pound remained nearly stable at $1.3553, following the release of data showing that UK economic growth in February exceeded expectations.

Both currencies remained near their highest levels since before the outbreak of the war between Iran and the United States in February.

In contrast, the dollar index — which measures the performance of the American currency against a basket of six major currencies — rose by 0.15% to reach 98.15 points. This followed eight consecutive sessions of decline through Wednesday, as the currency gave up most of its war-driven gains with investors returning to higher-risk assets amid a temporary truce.

Khoon Goh, head of Asia research at ANZ Bank, said: "Markets are now largely ignoring the conflict and are pricing in the probability of reaching some kind of settlement."

He added: "As the risk premium associated with the war recedes, we may see further pressure on the dollar and a resumption of the downward trend that actually began last year."

Regarding Asian currencies, the Japanese yen stabilized at 158.96 against the dollar after the Japanese Finance Minister announced that her country had agreed with the United States to intensify communication regarding exchange rates following her meeting with U.S. Treasury Secretary Scott Bessent.

In China, data showed that the economy grew by 5.0% during the first quarter, surpassing analyst expectations, supported by strong exports and stimulative policies.

The offshore Chinese yuan stabilized at 6.8187 against the dollar, near its highest level in three years.

The Australian dollar — often viewed as a proxy for global risk appetite — also rose to a four-year high of $0.7197 after March employment data largely met expectations, bolstering market bets on the probability of the Reserve Bank of Australia raising interest rates again in May to approximately 70%.