Aluminum touches seven-week high on waning stocks

Aluminium prices rose for a seventh session to touch their highest level in seven weeks on Tuesday, as fears of tight inventory and a continued supply deficit boosted the light metal. Benchmark three-month aluminium on the London Metal Exchange was up 1.01% at $3,351 a metric ton by 0700 GMT. That marked the metal's highest price since June 23. The most-traded aluminium contract on the Shanghai Futures Exchange rose 0.89% to 24,250 yuan ($3,595.15) a ton, its highest since June 15. "Aluminium’s move higher reflects continued tightness in the physical market, with LME inventories exceptionally low and supply from Bahrain and the UAE yet to recover fully," Rupankar RM, head of market research and data intelligence at AL Circle said. The U.S.-Iran war has disrupted aluminium shipments from the producers in the Middle East, which account for 9% of global capacity. Hopes of a deal between the two countries faded on Tuesday after U.S. President Donald Trump demanded Iranian reparations. For copper, a rising dollar dampened support from supply concerns. A more expensive dollar makes greenback-denominated commodities more expensive for those using other currencies. Copper prices on the LME edged down 0.16%, while the price on the SHFE gained 0.31%. The cash-to-three-month spread on the LME was in sharp backwardation at $145.5 a ton, signalling tight physical availability. LME stocks of the red metal have fallen sharply as traders consider a potential U.S. tariff on imports of refined copper. The market is closely watching macroeconomic data for signals on inflation, and what it might mean for interest rates. "Higher rates tend to hit industrial metals by weighing on economic growth," ANZ senior commodity strategist Daniel Hynes said in a note. Among LME metals, zinc dipped 0.08%, lead was steady, nickel was steady and tin lost 0.53%. Among SHFE metals, zinc added 0.41%, lead gained 1.02%, nickel lost 0.38% and tin lost 1.04%.