LONDON: Aluminium prices rose on Tuesday, helped by a weaker dollar, stronger auto sales in China and Beijing’s support for the property market while investors await a U.S. inflation update and Chinese trade data later in the week.
Benchmark aluminium on the London Metal Exchange (LME) was up 1.5% at $2,179 a metric ton by 1020 GMT after touching its highest since June 28 at $2,191.
“Metals appear to be largely following the U.S. dollar and the potential for further action from the U.S. Federal Reserve,” said SP Angel mining analyst John Meyer.
The dollar weakened to a two-month low, making dollar-priced metals more attractive for buyers holding other currencies. The U.S. inflation data is due on Wednesday.
Aluminium, used in transport, construction and packaging, is down 19% since mid-January when China removed its COVID-19 curbs. Though the hopes for a boost to consumption have not yet materialised, Beijing on Monday extended policies to shore up the real estate sector, providing some support for base metals.
“The ailing property market is being targeted, with loans for developers being extended by another year to ensure the delivery of homes under construction,” said Natalie Scott-Gray, a senior metals analyst at StoneX.
Copper prices rise as dollar falls after US jobs data
China’s January-May aluminium exports fell by 20%, raising questions over demand outside China in the face of high interest rates, Scott-Gray added.
Aluminium inventories in LME-registered warehouses fell to 531,725 metric tons after 2,350 tons of outflows, mainly from South Korea’s Gwangyang, daily data showed.
However, the discount on the LME cash aluminium contract against the three-month contract reached its widest since March 22, indicating plentiful near-term supply.
LME copper rose 0.3% to $8,394 a metric ton. Copper is squeezed between the 200-day and 50-day moving averages, with the 21-day moving average coming in between them at $8,415.
Zinc advanced 1.7% to $2,392 aper metric ton, lead slipped 0.1% to $2,061.5 while tin gained 0.6% to $28,120 and nickel fell 1.2% to $20,755.