LONDON: Aluminium prices slid to their weakest level in nearly two weeks on Tuesday on the prospect of an end to the Ukraine war that might allow major producer Russia to boost supply.
Benchmark three-month aluminium on the London Metal Exchange fell 1% to $2,562 a metric ton by 1610 GMT, its lowest since August 6.
Aluminium prices have slid for three sessions including Friday, when US President Donald Trump met his Russian counterpart Vladimir Putin in an effort to broker an end to the war in Ukraine.
When Trump met Ukraine’s President Volodymyr Zelenskiy on Monday, they both raised the prospect of three-way talks with Putin.
“Aluminium is leading the index lower this week and that could be part of the so-called peace dividend. Negative price action due to the prospect for increased supply,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
The LME has banned metal produced in Russia after mid-April 2024 from its warehousing system to comply with US and British sanctions imposed over Moscow’s 2022 invasion of Ukraine, and many companies have declined to use Russian material.
“Aluminium has been on an uptrend since April, and it looks like today we’re just dipping below that. So, I would imagine we’re also seeing some technical selling below $2,580,” Hansen added.
LME aluminium has rebounded 12% since touching an eight-month low of $2,300 in April.
Weighing on the metals complex was a slightly firmer dollar index as investors awaited policy cues from the annual Federal Reserve symposium in Jackson Hole later this week.
A stronger dollar makes commodities priced in the US currency more expensive for buyers using other currencies.
Among other metals, LME copper eased 0.4% to $9,693.50 a ton, nickel shed 0.8% to $15,030 and zinc fell 0.3% to $2,768.50, while lead edged up 0.1% to $1,973.50 and tin added 0.4% to $33,825.
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