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Aluminum prices fall as Trump's Iran War remarks cool supply fears

Aluminum prices fell on 'Tuesday as profit-taking impacted the market. Donald Trump's promise to end a Middle East conflict quickly eased supply concerns.

After hitting its highest level since January 30, at 25,860 Yuan per metric tonne, the most traded aluminium contract on the Shanghai Futures Exchange has pared earlier losses and closed daytime trade at 24,835 Yuan ($3,611.42).

The benchmark three-month aluminum on the London?Metal Exchange dropped 0.78% at $3,359 a ton as of 0744 GMT. On Monday, the contract reached its highest level since March 2022. It was $3,544 per ton.

Trump said on Monday that he expected a quick resolution to the Middle East conflict and warned that he would escalate his war against Iran if Tehran attempted to block oil shipments in the region.

The drop in (aluminum) prices was mainly caused by Trump's announcement to end the conflict, said a Chinese businessman under condition of anonymity because he wasn't authorized to speak to media.

The U.S. and Israel war against Iran effectively closed the Strait of Hormuz. This disrupted shipments from Gulf countries that account for around 9 percent of global aluminum supply. Supply fears arose, and prices soared over the last week.

Analysts at ING said that despite the fact that aluminum is one of most vulnerable metals in a region where prices are susceptible to a new upward trend, it remains vulnerable to any further supply shock.

SHFE copper gained 1.66% amid falling imported in the first two months of the year.

Nickel climbed by 0.72%. Tin rose by 3.83%. Zinc added?0.31%. Lead fell 0.51%.

$1 = 6.8768 Chinese yuan $1 = 6.8768 Chinese Yuan (Reporting and editing by Amy Lv, Lewis Jackson and RashmiAich).

(source: Reuters)