Aluminium falls to 2-month low on Iran peace hopes, stronger dollar
SINGAPORE: Aluminium fell to its lowest level in more than two months on Thursday, tracking a broader weakness in industrial metals and hopes that supply from the Middle East, a major producer, could improve if tensions ease. Benchmark three-month aluminium on the London Metal Exchange was down 0.74% at $3,146 a metric ton by 0300 GMT. It touched $3,141 a ton earlier, its lowest since July 28.…
Aluminium prices dropped to their lowest point in over two months on Thursday, reflecting a broader decline in industrial metals and optimism surrounding potential improvements in Middle Eastern supply should tensions ease. The benchmark three-month aluminium price on the London Metal Exchange fell 0.74% to $3,146 per metric ton by 3:00 AM GMT, marking its lowest level since July 28.
Earlier, it had reached $3,141 per ton. The Shanghai Futures Exchange observed a holiday and will resume operations on October 8. Market participants monitored the progress of US-Iran peace talks following Tehran's claim of receiving a US response to its latest proposal to revive the stalled Gulf ceasefire. The market recognized the impact of US-Iran negotiations on aluminium supply routes through the Gulf, as easing tensions would positively influence prices.
David Wilson, head of metals strategy at BNP Paribas, noted this sensitivity. Apart from the Middle Eastern dynamics, macroeconomic factors also contributed to the price decline. The US dollar approached a two-month peak, coupled with rising Treasury yields, indicating investor apprehension over inflation and government debt. A stronger dollar makes dollar-denominated commodities costlier for foreign buyers, while a faltering economy may reduce demand for industrial metals.
Copper prices on the London Metal Exchange fell 0.08%, ending September with their third consecutive monthly increase. Despite a dip in copper prices earlier in the month, the red metal has benefited from expectations of demand growth due to electrification and AI infrastructure development. However, macroeconomic concerns tempered this positive momentum.
In the broader LME metals market, zinc declined 0.4%, lead dipped 0.16%, nickel fell 0.05%, and tin rose 0.18%.
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