en.Wedoany.com Reported - The three-month aluminum contract on the London Metal Exchange (LME) closed 0.5% lower at $3,163 per ton on June 29, as concerns grew that mutual strikes between the US and Iran over the weekend could escalate into a larger conflict, disrupting metal supplies in the Middle East.
Analysts at Britannia Global Markets stated that the situation remains unstable, and any renewed disruption to aluminum supply could quickly reduce its availability, with logistics disruptions in the Strait of Hormuz having a significant impact on the aluminum market. Meanwhile, the premium of LME spot aluminum over the three-month contract fell from a 19-year high, turning into a discount. Analysts estimate that aluminum support is near the 200-day moving average at around $3,160 per ton, with resistance at the 100-day moving average near $3,410 per ton.
The US dollar posted its biggest gain in a year, as inflationary pressures increased the probability of US interest rate hikes. Alastair Munro, senior base metals analyst at Marex, noted that this interest rate environment initially impacted the energy and precious metals sectors, with pressure subsequently spilling over into base metals.
Copper prices rose in early trading on June 30, as the US studied imposing new tariffs on metal imports and Chinese data showed growth in industrial activity in June. US Commerce Secretary Howard Lutnick is expected to submit information to the president on the refined copper market and the potential of US refineries to facilitate a decision on import tariffs. US Comex copper inventories rose 3.73% in June, reaching 664,030 short tons on June 29.
China's official manufacturing purchasing managers' index rose to 50.3 in June from 50.0 in May, indicating that the industrial sector has returned to expansion mode, compared with a Reuters analyst forecast of 50.1. However, the data did not significantly boost copper prices, as investors remain uneasy about the uneven recovery of China's economy and the ongoing decline in the real estate sector, while uncertainty over the US-Iran diplomatic process dampened risk appetite.
