LME Aluminium Rose More than 3% as Supply Concerns Reignited and the US Dollar Weakened

SHANGHAI, Mar 31 (SMM) - LME aluminium and other industrial metals prices rose on Wednesday, as supply concerns reignited and the US dollar weakened. To the non-US buyers, metals were cheaper.

At 17:00 on March 30, London time (00:00 on March 31, Beijing time), LME three-month aluminium rose by $115/mt or 3.35% to close at $3,551/mt.
The new round of Russia-Ukraine peace talk ended in Istanbul, Turkey on March 29. Ukrainian President Zelensky said in a video address on social media that night that the signal released by the new round of peak talk between Ukraine and Russia was positive. Ukraine knew all the risks and believed that there was no reason to believe the Russian negotiators' remarks.

Russia is a major producer of aluminium, copper and nickel, and also a major producer of natural gas and coal for smelters. Since Russia launched a special military operation against Ukraine at the end of last month, which triggered sanctions and disrupted supply routes, the prices of these products have been rising.

Aluminium used in packaging, transportation and construction has increased by about 25% in 2022, while in 2021, due to the shortage of supply, the price of aluminium has risen by 42%.

"Metals haven't really found their feet yet,” said Jens Pedersen, an analyst at Danske Bank in Denmark.

He said that investors are weighing the hope of easing the situation and the possibility that the COVID-19 outbreak will reduce Chinese demand, as well as concerns about further sanctions, rising energy prices and supply disruption.

In the medium term, with the stability of supply routes, prices should fall.

Rusal, the world's largest aluminium producer outside China, said sanctions might delay project investment and impact profitability. The company's ore transportation from Guinea bauxite has stopped.

Ivan Arriagada, CEO of Antofagasta, a Chilean miner, expects that despite the current market volatility, the fundamentals of the copper market are stable and the high prices will remain for at least the next 12 months.

BHP Group Ltd said on Tuesday that it will invest more than $10 billion in Chile, the world's largest copper producer, in the next 50 years, subject to specific regulations and financial conditions.

Two sources revealed on Wednesday that China's major copper smelters finalized the lowest price of copper concentrate TC/RCs in the second quarter of 2022 at $80/mt and ￠8/lb.

Three-month copper closed up $51/mt or 0.49% to $10,367.50/mt.

The premiums of LME tin spots to the three-month futures contract rose to about $1,000/mt, the highest level since November 2021, indicating tight supply.