Aluminum prices fall to 3-month lows

Aluminum prices have fallen to their lowest level in nearly 3 months as progress in Middle East peace talks strengthens expectations that metal supply from the region will increase again.

The US granting Iran a 60-day permit to sell oil in international markets and the continuation of talks toward a permanent peace agreement have supported expectations that geopolitical risks in the region are easing.

On the London Metal Exchange, aluminum fell 1.65 percent to 3,308.50 dollars per ton, marking its lowest level since March 27.

Aluminum prices had risen 11 percent since the beginning of the year due to the war in the Middle East disrupting production and exports. The region normally accounts for approximately 9 percent of the global aluminum supply.

Conversely, the replenishment of stocks by smelters in the Persian Gulf, including shipments through the Strait of Hormuz, and increased production by manufacturers in China and Indonesia have limited the impact of the supply shock.

CHINA INCREASED WIRE EXPORTS

It was stated that Chinese traders have increased aluminum wire exports by taking advantage of inconsistencies in tax rules, with shipments exceeding 50 thousand tons in May, the highest level since at least 2020.

Chaos Ternary Futures reported that geopolitical risks have decreased with the agreements signed between the US and Iran, and that the possibility of the Strait of Hormuz opening has increased expectations that aluminum facilities in the Middle East will resume operations.

The firm stated that the market outside of China could remain under pressure due to weak demand and increasing supply.

On the LME this morning, copper fell 0.73 percent to 13,549 dollars per ton, zinc lost 1.16 percent to 3,566.50 dollars, and tin dropped 21.7 percent to 52,725 dollars.

News Source: 12punto