Two more metals fell last week to multi-year lows: aluminum and copper. The price drop is not surprising, as commodities keep falling, and the dollar keeps strengthening as other industrial metals like nickel have already fallen sharply amid China’s stock market tumble.
We recently wrote that aluminum would need to fall further in order to cause additional non-Chinese closures to balance the market. Chinese aluminum exports surged 35% year-on-year in the first half of the year, adding to global excess supply of the metal.
Three-month aluminum on the London Metal Exchange closed on Friday below $1,650/metric ton, hitting a six-year low.
Copper prices keep doing the same thing over and over: lower peaks, lower troughs. Copper’s fundamentals are nothing but bearish, due to excess supply from mines and weak Chinese demand for the metal. We recently highlighted some Chinese numbers showing poor demand from key sectors.
During the first half, we questioned every copper rally. Three-month copper on the LME closed on Friday below $5,300/mt, the lowest level in 6 years.