Aluminium prices stabilized on Thursday after reaching a six-week high earlier in the session, driven by a stronger dollar that offset fund buying amid tight supply concerns. The three-month aluminium contract on the London Metal Exchange rose 0.2% to $2,492 per metric ton, having peaked at $2,531, the highest price since July 9.
Market analysts noted that the increase was fueled by commodity trading advisors (CTAs) engaging in buying activity. Alastair Munro, a senior base metals strategist at Marex, mentioned that the market is now encountering evidence of producer offers.
Aluminium is on track for a 5% increase this week, marking its strongest weekly growth in four months, influenced by rising demand for alumina and tight bauxite supply. Additionally, commodities markets are closely monitoring developments in Canada, where potential rail freight disruptions could impact aluminium supply, as Canada is a major supplier to the U.S.
Despite the fluctuations, aluminium premiums paid by U.S. buyers have remained steady. Meanwhile, LME zinc prices also saw an uptick, rising 0.7% to $2,871 per ton, following adjustments by large Chinese zinc smelters in response to falling ore processing prices.