(March 10): Aluminium extended its retreat from a four-year high after US President Donald Trump signalled a possible end to the Iran war, which has disrupted supplies of the metal from the Middle East.
Prices of the most widely used metal fell as much as 3.5% on the London Metal Exchange (LME) after Trump said the war with Iran would be resolved “very soon” as he confronted mounting economic and political pressures after days of dramatic fluctuations in oil markets.
Aluminium prices had already slipped on Monday amid a broad sell-off across financial markets after earlier touching US$3,544 ($4,520) a ton, the highest since March 2022, on the escalating conflict. The effective closure of the Strait of Hormuz has cut off Persian Gulf shipments of the metal, which account fro about 9% of global supply.
The cash to three-month aluminium spread also eased to US$22.47 a ton on Monday, from as high as US$59 earlier in the session, pointing to less concern over supply tightness.
Trump’s comments have eased concerns around Middle East supplies, said Jon Li, an analyst with Guangzhou Finance Holdings Futures Co. Prices are unlikely to fall much further though, and aluminium in Shanghai could find support around CNY24,000 (US$3,475 or $4,429) a ton on rising spring demand in China, he added.
See also: Aluminium touches 2022 high as Iran war stokes supply crunch
Aluminium was down 2% at US$3,315 a ton on the LME as of 9.38am in Shanghai on Tuesday. Prices on the Shanghai Futures Exchange were down 1.6% to CNY24,540 a ton. Copper rose 0.5% to US$13,024.
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