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Edging 1.2% higher over the morning, the LME’s three-month aluminium price pushed back over $2,100 per tonne for the first time in two weeks.
Buoyed by volatile spread movements over the course of the week – typified in Monday’s sharp swing in the light metal’s nearby cash/August spread – the metal’s cash/three-month spread has moved from a backwardation of $12.48 per tonne, to $11.50 per tonne contango over the morning trading session.
Meanwhile, speculation surrounding United States-imposed sanctions against UC Rusal have resurfaced after a period of inactivity over June and July, releasing widespread volatility into the market.
On Monday, the Russian aluminium producer’s share value climbed by 14.8% after the US suggested it was open to lifting sanctions against the company.
Elsewhere, a moderate uptick in copper prices has resulted in the metal’s three-month price finding support around $6,150 per tonne.
“Collective negotiations at Escondida copper mine in Chile are continuing to drag on. The current collective agreement expires at the end of this month, and the mine operator must make the union a new offer beforehand. If this is rejected, government-led mediation talks will be held,” Commerzbank Research said in a morning note.
“If these yield no result either, a strike could ensue from mid-August. This could see the global copper market, which according to data from the International Copper Study Group was in surplus in the first four months of the year, slide back into deficit,” it added.
While lead’s three-month price was the only metal to record a marginal loss, broad stability in nickel, zinc and tin prices remain indicative of a brighter tone to metals trading this week, despite ongoing pressure from global trade tensions.
Base metals push higher; lead, tin consolidate
Currency moves and data releases