Aluminium prices weakened further on Wednesday, reaching their lowest levels in three months as investors reassessed supply risks in the Middle East and reacted to continued strength in the U.S. dollar.
The three-month aluminium contract on the London Metal Exchange fell 0.76% to $3,208 per metric ton by 07:01 GMT. Earlier in the session, the contract dropped to $3,191 per ton, its lowest level since 24 March.
On the Shanghai Futures Exchange, the most actively traded aluminium contract settled 1.43% lower at 23,405 yuan ($3,439.23) per ton after touching 23,320 yuan during the day, the weakest level since 20 March.
Analysts said the market is increasingly pricing in a recovery of aluminium supply from the Gulf region as production and transportation disruptions linked to the conflict begin to ease.
Improving expectations for shipping activity and lower energy-related pressures have reduced concerns about supply shortages, although market participants expect the return to normal conditions to take place gradually.
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