In London, copper and aluminium prices experienced an upturn on Wednesday, buoyed by a weaker U.S. dollar, which offset apprehensions regarding demand from China, the top metals consumer. During official open-outcry trading, three-month copper on the London Metal Exchange (LME) surged by 0.9% to $9,550 per metric ton, reversing previous declines attributed to slower-than-expected industrial output growth in China.
Copper, utilized in power and construction, has demonstrated an 11.5% increase since the beginning of 2024, with a rally in March and April propelling the price to $9,640.50, marking the highest level since June 2022.
While the dollar exhibited a slight decline, it remained in close proximity to its 5-1/2-month high, with Federal Reserve officials reinforcing expectations of sustained higher interest rates. A weaker U.S. currency enhances the attractiveness of dollar-denominated metals for buyers utilizing alternative currencies.
LME aluminium added 0.1% to reach $2,563 a ton in official activity, with the market continuing to process the ban on the London Metal Exchange and CME from accepting newly produced Russian aluminium, imposed by the U.S. and Britain. Despite the news of U.S. President Joe Biden’s proposal for higher tariffs on Chinese steel and aluminium, the impact on the aluminium market was relatively subdued, particularly considering China’s limited unwrought aluminium exports to the U.S. in recent years.
Amid uncertainty surrounding post-sanctions changes for overall Russian supply and delivery to LME-registered warehouses, some volatility in the aluminium market is anticipated in the coming days. However, analysts expect the market to adapt to these new dynamics, with Russian material likely to find new sanction-neutral buyers.
Notably, LME data revealed that investors notified their intent to remove nearly 90,000 tons of aluminium from warehouses in Gwangyang, South Korea over the past two days. Traders suggest that this location is popular for storing Russian material.