Aluminium fell to the lowest since mid-February as a strengthening US dollar continued to pressure commodities.
The industrial metal extended losses after dropping by 16% in June, the biggest monthly decline since 2008. The winding down of the Middle East war has weighed on aluminium, which had surged in March through May due to the loss of supply from the region that accounts for nearly a 10th of global output.
A gauge of the dollar rose for a second day. It’s rallied 2.5% over the last two months, partially due to a more hawkish stance from the Federal Reserve. That makes commodities priced in the currency more expensive for many buyers.
Investors are worried about further gains in the dollar, which affects sentiment across industrial metals, as well as gold and silver, said Zhenting Zhou, a trader at Hangzhou Chenglian Industrial Co. Some Chinese investors have also been diverting funds from commodities into equities due to a local stocks rally, he said.
Aluminium fell 0.5% to US$3,071 a tonne on the London Metal Exchange as of 11.43am in Shanghai (same time as Malaysia) after dropping to US$3,060 earlier, the lowest since Feb 19. Copper lost 0.9% to US$13,254. Iron ore declined 1.6% to US$97.50 a tonne in Singapore.
The market is also waiting for Washington’s pending review of refined copper imports, which were excluded from last year’s tariffs. Commerce Secretary Howard Lutnick was due to deliver an update to US President Donald Trump on the US copper market by Tuesday.
Bloomberg
