Aluminium is set to experience its fourth straight weekly decline, representing the longest series of losses since April 2025. This downturn is driven by a renewed selloff in Asian tech stocks, alongside a stronger US dollar and increased supply from the Middle East.
The lightweight metal is expected to fall by about 7% for the week, as a temporary US-Iran peace agreement boosts expectations for renewed shipments from a region contributing nearly 10% of global production. The ongoing conflict has disrupted local smelters and obstructed the transport of metal and raw materials into and out of the Persian Gulf.
However, an attack on a cargo ship on Thursday reignited concerns regarding safe passage through the Strait of Hormuz, adding uncertainty to future transit routes.
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Industrial metals, including copper, also faced downward pressure on Friday due to the renewed selloff in Asian tech shares, underscoring the heightened volatility affecting the sector this week. Metals often correlate with technology stocks because of their use in electronics, wiring, and AI-driven data centers.
As per brokerage Jinrui Futures, aluminium is expected to continue fluctuating at lower levels, constrained by bearish short-term macro sentiments.
The pressure on metals intensified earlier in the week when US Federal Reserve policymakers expressed growing support for interest rate increases in the coming months. Higher borrowing costs affect commodities that do not generate interest, making them less attractive compared to yield-bearing assets like Treasuries.
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The strengthening dollar has also made metals priced in US currency more expensive for most buyers. A measure of the greenback is expected to rise by approximately 0.7% this week.
As of 11:10 a.m. in Shanghai, aluminium decreased by 0.2% to $3,158 per ton on the London Metal Exchange. Other base metals experienced drops as well, with copper down 0.9% and nickel decreasing by 1%.
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