Aluminium slips to two-week low at LME amidst global market uncertainty
Aluminium prices moved lower on the London Metal Exchange (LME) on Thursday, November 7, reaching a two-week low as weakness in global equities weighed on sentiment across base metals. The decline came even as prospects for demand in China, the world’s biggest producer, continued to look firm.
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Benchmark aluminium on the London Metal Exchange (LME) slipped 0.4 per cent to USD 2,838.50 a tonne by 1619 GMT on Thursday, having earlier touched USD 2,831.50, the lowest since 23 October.
Prices were up earlier in the day but reversed course after Wall Street’s major indexes fell, with technology shares facing renewed selling.
Alastair Munro, senior metals strategist at Marex, said that uncertainty around the US government shutdown and limited economic data could be driving a cautious mood ahead of the Federal Reserve’s rate decision in December. He added that traders are also adjusting positions as the trading year nears its close.
Earlier in the week, aluminium touched USD 2,920 a tonne, which was the strongest level since May 2022 and supported by firm demand and tighter market conditions in China, Neil Welsh, head of metals at Britannia Global Markets, said.
Lately, more funding has flowed into LME aluminium contracts as investors bet that years of oversupply may be easing. The outlook appears optimistic, as production growth in China is nearing the government’s capacity ceiling.
The European aluminium premium, which buyers pay over the LME benchmark, has climbed to USD 328 from USD 183 in June. It reached USD 330 at the start of the month, the highest since February. Morgan Stanley said the rise reflects reduced pressure from Canadian primary metal supplies and expected costs from the EU’s carbon border adjustment mechanism (CBAM).
Elsewhere on the LME, copper fell 0.2 per cent to USD 10,678.50 a tonne after reaching a record USD 11,200 last week amid supply concerns. Zinc gained 0.1 per cent to USD 3,046; lead rose 0.5 per cent to USD 2,028.50; and tin increased 0.4 per cent to USD 35,750. Nickel remained unchanged at USD 15,035.
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