Investor Confidence Boosts Aluminium Prices to Two-Year Highs

Aluminium prices in Shanghai have soared to their highest levels in over two years, reflecting investor confidence in the robust fundamentals of this lightweight metal. The most active July aluminium contract on the Shanghai Futures Exchange jumped by 3% to 21,935 yuan per ton, hitting its peak since March 2022. Similarly, three-month aluminium on the London Metal Exchange also saw a 0.7% increase, reaching $2,785.50 per metric ton, consolidating its position at a more than two-year high.

This surge in aluminium prices can be attributed to the strong demand from China, particularly in the solar and electric vehicle sectors. The prices of alumina, a crucial material for aluminium production, have been on the rise due to recent disruptions in the supply chain. Furthermore, market sentiment received a boost when a global aluminium producer offered a premium of $175 per metric ton to Japanese buyers for primary metal shipments scheduled for July-September.

On the flip side, LME copper experienced a 0.7% decline to $10,382.50 per ton, while nickel fell by 0.8% to $20,335. Zinc also dipped by 0.2% to $3,097.50, tin slid by 1.1% to $33,745, and lead slipped by 0.8% to $2,302. In the SHFE market, copper dropped by 1.1% to 84,000 yuan per ton, tin was down by 0.6% at 278,310 yuan, nickel lost 0.9% to 153,900 yuan, while zinc rose by 0.2% to 25,120 yuan and lead remained flat at 18,910 yuan.

The surge in aluminium prices to two-year highs underscores the strong demand dynamics in the market, driven by key sectors like solar and electric vehicles. As supply chain disruptions continue to impact the prices of key materials like alumina, investors remain optimistic about the outlook for aluminium. While other metals experienced mixed trends, aluminium stands out as a top performer, signaling a positive trend for the industry.