LONDON: Aluminium prices dipped on Wednesday as investors took profits following an eight-session rally, which kept the metal below key technical resistance levels.
The most actively traded three-month aluminium contract on the London Metal Exchange fell 1% to $2,479 per metric ton as of 1034 GMT. This decline follows a five-week high reached on Tuesday, spurred by a surge in raw material alumina prices in China, hitting their highest level in three months.
“The pause in the aluminium rally is more technical rather than driven by changes in market fundamentals,” noted Ole Hansen, head of commodity strategy at Saxo Bank. He added that funds are re-positioning as aluminium prices approach the significant $2,500 technical resistance level.
Aluminium’s raw material supply remains constrained, with bauxite shipments from leading producer Guinea affected by the rainy season. Additionally, production cuts outside China have reduced global alumina supplies.
Copper saw a modest recovery, rising 0.6% to $9,258 per ton, though further gains were limited by a five-year high in stockpiles at LME-monitored warehouses, typically a sign of weak consumption.
Market watchers are also anticipating comments from U.S. Federal Reserve Chair Jerome Powell on Friday, looking for signals on the pace of U.S. monetary easing.
Among other metals, lead rose 1.6% to a three-week high of $2,086, driven by a continued decline in LME inventory in Asia, with stocks down 21% to 185,500 metric tons since the start of August. Zinc climbed 1.3% to $2,842, tin gained 0.7% to $32,505, while nickel edged down 0.4% to $16,960.
