Aluminium rises as US-Iran ceasefire tested
- The most-traded aluminium contract on the Shanghai Futures Exchange was up 0.72% at 23,085 yuan ($3,396.60) a ton
SINGAPORE: Aluminium prices gained on Wednesday, as supply and risk concerns rose after new tests to the fragile US-Iran ceasefire. Benchmark three-month aluminium on the London Metal Exchange added 0.61% at $3,156.5 a metric ton by 0300 GMT.
The most-traded aluminium contract on the Shanghai Futures Exchange was up 0.72% at 23,085 yuan ($3,396.60) a ton.
The latest US strikes on Iranian targets after projectiles struck ships in the Strait of Hormuz threatened to once again generate supply risk that had largely dissipated following last month’s ceasefire deal.
The Middle East accounts for around 9% of global aluminium smelting capacity.
Aluminium plunged 16% in June, its biggest monthly decline since the 2008 global financial crisis, after peace talks between the countries saw participants price out the war risk premium.
The market is still expected to remain in a deficit this year, ING analysts said in a note, and lower prices have attracted some buying interest in China, offering price support.
Elsewhere, copper edged slightly down ahead of the publication of minutes of the US Federal Open Market Committee’s June meeting on Wednesday, which will be closely watched for potential clues on the Fed’s interest rate path.
Fears of higher-for-longer interest rates have weighed on the red metal, which benefits from economic growth, as higher rates dampen economic activity. LME copper lost 0.16% and the SHFE price dipped 0.09%.
Demand in world’s biggest consumer China remains strong.
The Yangshan copper premium, which tracks buying interest there, hit $80 a ton on Tuesday, a 13-month high.
Among other LME metals, zinc dipped 0.14%, lead gained 0.98%, nickel lost 0.57% and tin lost 0.96%.
Elsewhere on SHFE, zinc was little changed, down only 0.04%, lead rose 1.51%, nickel lost 0.79% and tin ticked 0.06% higher.
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