LONDON: Aluminium prices rose on Tuesday as markets weighed potential supply tightness amid Middle East tensions and continued outflows from visible inventories. Benchmark three-month aluminium on the London Metal Exchange gained 0.8 percent to USD3,140 a metric ton by 1600 GMT, approaching resistance coming from the 200-day moving average at USD3,161.
Two tankers were hit in the Strait of Hormuz and Iran said there would be no more peace talks unless US President Donald Trump halted his repeated threats to restart the war.
In June, aluminium fell 16 percent, its biggest monthly decline since the 2008 global financial crisis, as peace talks between Washington and Tehran fuelled optimism that Gulf supplies via Hormuz would resume.
“Aluminium is still looking oversold in the short term. But turnover is running well down on average and interest is muted following the recent risk reduction,” said Alastair Munro, senior base metals strategist at broker Marex.
Analysts expect the global supply of the metal, used in transport, packaging and construction, to be in deficit this year, while continuing outflows from stocks in the LME-registered warehouses provide further support.
The total stocks are at 292,425 tons, the lowest since September 2022. In other LME metals, copper eased 0.4 percent to USD13,350.50 per ton. It has been trading in a narrow range for a week as the market is awaiting a decision by Washington on possible import tariffs on refined copper, while outflows from the LME stocks to the US continue.
China’s Yangshan copper premium, which reflects buying appetite in the world’s largest consumer, rose 8 percent to USD80 a ton, a 13-month high. Zinc fell 0.5 percent to USD3,571 after hitting a two-week high of USD3,600, lead rose 0.3 percent to USD1,885.50, tin added 0.1 percent to USD53,100 and nickel lost 0.5 percent to USD16,340.
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