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2026-02-20 21:36:35
[Aluminum Prices Hit One-Week High, Copper Inventory Surge Drags Down Third Consecutive Weekly Decline] ⑴ Aluminum prices on the London Metal Exchange hit a one-week high on Friday, while three-month copper rose 0.3% to $3,078, briefly reaching $3,103, its strongest level since February 13. The core factor supporting aluminum prices remains persistent supply concerns; since hitting its highest level since April 2022 on January 29, aluminum prices have fallen by 8%. ⑵ Supply constraints are key to aluminum price resilience. ING strategists point out that aluminum has outperformed other metals because its global supply growth remains constrained, making it more sensitive to minor improvements in sentiment. Production in China, a major producer, is nearing the government-set annual capacity limit of 45 million tons, while a US smelter has shut down due to high electricity prices. ⑶ The copper market faces a completely different set of pressures. LME three-month copper rose slightly by 0.1% to $12,820, but is on track for a weekly decline of about 1%, marking its third consecutive week of losses. A surge in inventories is the main drag. (4) LME copper inventory data released on Friday showed that registered warehouse receipts increased by 9,575 tons to 235,150 tons, the highest level since March 2025. Inventories have surged 65% year-to-date, exerting sustained downward pressure on prices. (5) Overall market trading was subdued. Trading volume was moderate due to the Shanghai Futures Exchange being closed for the Spring Festival holiday. Analysts pointed out that some position adjustments occurred before the weekend, and liquidity and price discovery functions are expected to improve after Chinese participants return next week. (6) A stronger US dollar put additional pressure on the metals market. The US dollar index is on track for its biggest weekly gain since October, supported by better-than-expected economic data and a more hawkish outlook from the Federal Reserve. A strong dollar makes dollar-denominated commodities more expensive for buyers holding other currencies.
