Aluminum Heads: Fourth Weekly Release as Middle East Supply Stabilizes

Aluminium is on track for its fourth consecutive weekly decline, the longest losing streak since April 2025. This downturn is driven by a fresh selloff in Asian tech stocks, alongside a strengthening US dollar and increased supplies from the Middle East.

The lightweight metal is anticipated to decrease by roughly 7% this week, as a temporary US-Iran peace agreement heightens expectations for renewed shipments from a region that accounts for about 10% of global production. The ongoing conflict has disrupted local smelters and obstructed the movement of metal and raw materials in and out of the Persian Gulf.

Nonetheless, an attack on a cargo ship on Thursday has reignited concerns over safe passage through the Strait of Hormuz, casting doubt on future transit routes.

Industrial metals, including copper, also experienced negative impacts on Friday due to the renewed selloff in Asian tech shares, emphasizing the heightened volatility affecting the sector this week. Metals often correlate with technology stocks due to their applications in electronics, wiring, and AI-driven data centers.

According to brokerage Jinrui Futures, aluminium is expected to continue fluctuating at low levels, constrained by bearish short-term macroeconomic sentiment.

The pressures on metals intensified earlier this week when US Federal Reserve policymakers expressed increasing support for interest rate hikes in the upcoming months. Higher borrowing costs create challenges for commodities that do not yield interest, making them less attractive compared to yield-bearing assets like Treasuries.

The strengthening dollar has also made metals priced in US dollars more costly for most buyers. A measure of the greenback is forecasted to rise by about 0.7% this week.

As of 11:10 a.m. in Shanghai, aluminium dropped by 0.2% to $3,158 per ton on the London Metal Exchange. Other base metals also saw declines, with copper down 0.9% and nickel losing 1%.

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