Aluminium drifts lower as supply prospects improve

Aluminium prices fell on Thursday as improving supply expectations outweighed support from resilient manufacturing data. Benchmark three-month aluminium on the London Metal Exchange was down 0.46% at $3,062 a metric ton by 0700 GMT. It fell to $3,040 per ton earlier in the session, its lowest since February 19. The most-traded aluminium contract on the Shanghai Futures Exchange declined 0.38% to 22,400 yuan ($3,300.09) a ton. Emirates Global Aluminium said it would restore production sooner than expected at its damaged Al Taweelah complex - one of the world's largest aluminium production sites - signalling an improving supply outlook. On Wednesday, Norsk Hydro said it would partially restartaluminium production at its smelter in Slovakia in the fourth quarter of the year. The war risk premium that supported aluminium prices through spring has faded, and buyers of the light metal have found alternative sources of supply for the short term. Aluminium prices were supported by resilient manufacturing data, after surveys from China, Europe, and the U.S. on Wednesday pointed to steady activity despite higher raw material prices. Elsewhere, copper was subdued after a closely watched June deadline for a recommendation on potential U.S. tariffs on refined copper passed without an announcement from the White House. On the LME, copper fell 0.49% to $13,234 and dipped 0.49% to 101,950 yuan a ton on the SHFE. Base metals were partially supported by balanced comments on inflation from U.S. Federal Reserve Chair Kevin Warsh, easing concerns that stubborn price pressures could lead to higher-for-longer interest rates. Higher rates weigh on growth-dependent industrial minerals by suppressing economic activity. Among other LME metals, zinc lost 1.31%, lead dipped 0.16%, nickel lost 0.79% and tin shed 1.32%. Elsewhere on SHFE, zinc declined 1.47%, lead lost 0.85%, nickel fell 0.96% and tin dipped 0.23%.