Aluminum Falls to Near 3-Month Low

Aluminum futures in the UK dropped to around $3,320 in early Asian trading, the lowest since March 27, amid prospects for the resumption of metal exports from the Persian Gulf following progress in US-Iran talks. The two countries have agreed on a roadmap toward a final agreement following their first round of high-level talks, raising expectations for a return of supplies from the Middle East, which makes up roughly 9% of global output. However, uncertainties remain, as major Gulf producers continue to face operational disruptions following earlier Iranian attacks. Additional downside pressure comes from rising output in China, the world’s largest producer, and increased production from smelters in Indonesia. On the demand side, weak economic data from China has added concerns, as the country is also one of the biggest consumers of the metal. A stronger US dollar is also weighing on prices, as it makes dollar-priced commodities more expensive for buyers using other currencies.