Aluminium falls to 2-month low on Iran peace hopes, stronger dollar

Business Recorder reported that aluminium slid to its weakest level since July 28 on Thursday, as traders weighed the prospect of Middle Eastern supply returning sooner if regional tensions subside. By 0300 GMT, the benchmark three-month contract on the London Metal Exchange had dropped 0.74 per cent to $3,146 a metric ton, after touching $3,141 earlier. Weakness across industrial metals added to the pressure.

Diplomacy between Washington and Tehran also shaped sentiment. Iran said an American answer had arrived for its newest proposal to revive the Gulf truce that had broken down, though Donald Trump had recently turned that proposal down. Wilson of BNP Paribas noted that aluminium is sensitive to shipments crossing the Gulf, so a development that reopens the waterway would undercut prices.

Currency and bond markets added to the downbeat tone. The dollar sat close to a two-month peak while US bond yields kept rising, a move linked to worries about inflation and public debt. A firmer greenback makes dollar-priced metals dearer for purchasers holding foreign currencies. Copper edged down 0.08 per cent, zinc fell 0.4 per cent, lead slipped 0.16 per cent and nickel eased 0.05 per cent, while tin gained 0.18 per cent.