LONDON: Aluminium prices steadied on Thursday after hitting a six-week high earlier in the session, as a stronger dollar offset fund buying spurred by concerns over tight supply of the key raw material. Three-month aluminium on the London Metal Exchange rose 0.2% to $2,492 a metric ton in official open-outcry trading.
The metal used in transportation, construction and packaging touched $2,531, its highest since July 9, earlier in the session amid buying by funds known as commodity trading advisors (CTAs), which are largely driven by computer programs.
“The market is now running into some evidence of a producer offer,” said Alastair Munro, senior base metals strategist at Marex. Aluminium is on track for a 5% gain this week, its strongest weekly growth in four months, against a backdrop of higher demand for alumina, the intermediate product between bauxite and aluminium, and tight supply of bauxite.
Commodities markets are also keeping an eye on Canada, where rail freight could come to a grinding halt after the country’s two biggest railroad operators announced simultaneous work stoppages over labour contracts. Canada is the largest aluminium supplier to the US, but the aluminium premiums paid above the LME benchmark by US buyers have been steady so far.
Meanwhile LME zinc was up 0.7% at $2,871 a ton in official activity after hitting $2,882, its highest since July 17. Large Chinese zinc smelters have agreed to adjust planned maintenance on production lines and postpone commissioning of new capacity as falling ore processing prices have eroded profits. In other metals, LME copper fell 0.8% to $9,185 a ton, lead was down 0.2% at $2,082, tin added 0.4% to $32,825 and nickel lost 2.4% to $16,500.
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