The three-month aluminum price on the London Metal Exchange is back below $1,800/metric ton. In April, aluminum rallied with most industrial metals thanks to a weaker dollar. However, in May the dollar bounced back up, unwilling to give up more ground, hurting industrial metals.
Aluminum prices are now hanging near previous troughs. If the dollar continues to rally, we would expect aluminum prices to hit record lows this year.
Same story with nickel. The metal rallied in April after hitting its lowest level in six years, but in May, nickel also fell and is now near that record low. As with aluminum, a stronger dollar would put nickel prices into a tailspin.
What This Means For Metal Buyers
The dollar is showing some positive moves again. Moreover, the fact that metal prices are unwilling to make significant rallies is another argument to remain bullish in the dollar and bearish in commodities/metals.