Aluminum fell to the lowest level in one month after tensions in the Middle East escalated and expectations of US rate hikes damped the demand outlook for industrial metals.
Sentiment soured as stocks dropped after US forces struck Iran. The prolonged war has stoked inflation and raised the prospect of higher interest rates that could slow global growth and demand for metals.
Traders are waiting on Wednesday’s US inflation report, which may provide the clearest signal yet on whether rates will stay elevated for longer. Bond traders are piling into positions targeting multiple Federal Reserve hikes in coming months, with some looking for a move as early as September.
The metals market is focusing on tighter global liquidity following robust US employment data, which is bearish for risk assets from gold and silver to industrial materials, said Li Xuezhi, research head at Chaos Ternary Futures Co.
Long-term demand prospects are still intact, however, driven by increased spending on technology. The latest headline is that China is preparing to spend around 2 trillion yuan over the next five years on building data centers. Global spending on data infrastructure has become a key pillar of the bullish outlook for copper and other metals in recent months.
The idea of building a nationwide computing network was laid out in China’s five-year plan earlier in 2026, and the investment is in line with expectations and isn’t affecting prices in the short term. said Li.
Aluminum on the London Metal Exchange fell as much as 1.4% to $3,498 a ton, the lowest since May 11, before trading at $3,507.50 a ton as of 10:42 a.m. in Shanghai. Copper declined 0.3% to $13,571.50 a ton, while tin dropped 1.9% to $51,500 a ton.
This article was generated from an automated news agency feed without modifications to text.
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