fxs_header_sponsor_anchor

News

Aluminium: Bulls keep reins at decade high above $2,750, Guinea eyed

  • Aluminium remains firmer around multi-day tops on geopolitical issues, USD weakness.
  • Guinea’s political turmoil, receding odds of Fed’s tapering favour bulls.
  • US traders’ return, risk catalysts eyed for near-term directions.

Aluminium prices on London Metal Exchange (LME) jumped to the highest since May 2011 the previous day, around $2,770 per tonne, on political turmoil in the world’s second-largest raw material bauxite producer Guinea.

The Financial Times (FT) mentions the military coup in the African nation that overthrown President Alpha Conde on Sunday. The news also said, “Guinea supplies about 25 per cent of the world’s bauxite, mostly to China and Russia.”

Reuters quote prices in China at 18 months high of around $50.50, up 16% in 2021 while saying, “The unrest did not have any immediate impact on bauxite operations, which are key to Guinea's economy as its main foreign currency earner. The country produced 88 million tonnes of bauxite last year, according to mines ministry statistics.”

In addition to the geopolitical tensions, the US dollar weakness also underpins the commodity bulls. That said, the US Dollar Index (DXY) drops back towards 92.00, down 0.08% intraday after marking a corrective pullback from the monthly low the previous day.

Behind the US dollar pullback could be the market’s cautious optimism over adjustments of the monetary policies at the key central banks as the virus concerns challenge economic recovery.

Amid these plays, S&P 500 Futures and US 10-year Treasury yields print mild gains at the latest.

Moving on, market players will keep their eyes on the US and Canadian traders’ return after Monday’s Labour Day off. The US dollar’s reaction to the latest developments will be vital for the aluminium traders as the geopolitical tension in Guinea may recede soon.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.