 |
| Nonferrous metal |
Aluminum Market Faces Supply Disruptions
Nonferrous metals volatility has surged due to ongoing Middle East conflict. Consequently, aluminum supply risks have increased in global markets. Qatalum in Qatar now operates at 60% capacity after reduced gas supply. Meanwhile, Aluminum Bahrain declared force majeure, threatening European imports. As a result, LME aluminum prices reached four-year highs, spiking U.S. Midwest premiums and affecting primary aluminum scrap demand positively.
Copper and Precious Metals React to Market Pressures
In contrast, copper prices declined despite improving demand in red metals sectors. Spot copper fell 11 cents per pound on Comex, closing at $5.71, before further intraday losses. Meanwhile, precious metals weakened due to a stronger U.S. dollar. Freight rates and fuel surcharges also rose sharply, reflecting the conflict’s impact on shipping costs. Therefore, global traders must adjust strategies amid rising transportation and raw material expenses.
Outlook for Nonferrous Metals and Scrap Markets
Looking forward, nonferrous metals volatility is expected to persist while Middle East tensions continue. Aluminum could test prior highs of $1.75 per pound, further pressuring scrap supply. Secondary aluminum markets remain soft due to limited automotive and housing demand. Consequently, strategic sourcing of recycled and primary feedstocks will remain critical for mills and traders globally.
ScrapInsight Commentary
Nonferrous metals volatility highlights the fragility of global supply chains amid geopolitical risks. Aluminum’s supply constraints boost primary scrap demand, while secondary markets lag due to weaker end-user demand. Investors and policy analysts should monitor Middle East developments and Section 232 tariff impacts on U.S. premiums for strategic decision-making.
