LONDON: Aluminium prices fell to a 12-week low on Thursday and copper hit its lowest in two weeks as a stronger dollar and thin trading volumes weighed on sentiment, with markets in top consumer China closed for a public holiday.
Benchmark three-month aluminium on the London Metal Exchange was down 1.3percent at USD3,130 a metric ton in official open-outcry trading after touching its lowest since July 7 at USD3,115.
The dollar marked its strongest level since May 2025, with Treasury yields hitting their highest in decades. A stronger dollar makes dollar-denominated metals more expensive for buyers using other currencies.
Aluminium prices are down 17percent since hitting a four-year high in June on easing worries about supply from the Gulf region and expectations of new production capacity in Indonesia.
Analysts at Macquarie downgraded their forecast for this year’s deficit in the global aluminium market to 820,000 tons, down 120,000 tons from their June estimate, as restarts in the Middle East progressed faster than expected.
Emirates Global Aluminium said in late August that it had brought a quarter of its Al Taweelah smelter in Abu Dhabi back online as the company works to recover from damage caused by an Iranian attack in March.
In the near term, the aluminium market is relatively tight, Macquarie said in a research note, squeezed by Chinese downstream restocking ahead of the public holiday. However, the market is still on track to swing to a surplus of 410,000 tons in 2027. Macquarie expects average aluminium prices at USD3,050 in 2027 compared with USD3,325 this year.
On the supply side, Rio Tinto reached agreements to secure the ongoing operation of its Bell Bay Aluminium smelter in Tasmania to the end of 2031.
Among other LME metals, copper fell 0.9percent to USD14,287 a ton in official activity after hitting its lowest since September 17 at USD14,213.50. Supervisors at Chile’s Escondida copper mine, the world’s largest, rejected a collective contract offer, paving the way for a potential strike. LME zinc lost 1.7percent to USD3,765 a ton, lead eased by 0.4percent to USD1,867, tin rose 1.0percent to USD54,450 and nickel dipped 1.2percent to USD15,740. The Shanghai Futures Exchange was closed for China’s National Day holiday until October 8.
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