Aluminium wavers as market weighs supply, macros

By Solomon Cefai

Aluminium fell slightly on Tuesday as the market continued to gauge supply conditions and the wider macroeconomic outlook.

Benchmark three-month aluminium LME:AH1! on the London Metal Exchange edged down 0.16% to $3,110.5 a metric ton by 0300 GMT. It hit a one-week high earlier in the session before declining in line with most of the wider base metal complex.

The most-traded aluminium contract on the Shanghai Futures Exchange COMEX:ALI1! added 0.33% at 22,910 yuan ($3,373.53) a ton. This would be the fourth consecutive daily increase there.

Aluminium stablised over the last week after being battered by expectations of returning supply from the Middle East and the receding Gulf war risk premium.

But some analysts warn it will take more time for supply to normalise, and physical stocks remain low. Total stocks (MALSTX-TOTAL) in LME-registered warehouses are at their lowest levels since 2022.

Elsewhere, copper prices dipped slightly, falling 0.18% on both the LME LME:CA1! and 0.09% on the SHFE COMEX:HG1!. Traders expecting news from the White House on potential tariffs on refined copper last week were left disappointed, with no announcement forthcoming. The market was left in wait-and-see mode.

Tariff considerations have supported copper by pulling material into U.S. warehouses. Demand growth expectations tied to AI infrastructure, grid upgrades and electric vehicles have also supported prices for the red metal.

Data released overnight by the U.S. futures regulator showed that speculators trimmed their bullish position on Comex in the week to June 30.

The dollar TVC:DXY fluctuated throughout the morning, while oil ICEEUR:BRN1! edged up but remained near its pre-Middle East war price levels.

The wider base metal complex also mostly fluctuated, as market participants sought direction in a relatively calmer macroeconomic environment.

On the LME, zinc COMEX:ZNC1! dipped 0.18%, lead MCX:LEAD1! dipped 0.13%, nickel MCX:NICKEL1! dipped 0.29% and tin MYX:FTIN1! lost 0.64%.

On the SHFE, zinc COMEX:ZNC1! gained 0.98%, lead MCX:LEAD1! lost 0.47%, nickel MCX:NICKEL1! was steady and tin MYX:FTIN1! dipped 0.1%.

($1 = 6.7911 Chinese yuan renminbi)