FX.co ★ Aluminum Pulls Back

Aluminum futures have declined to $2,560 per tonne, marking the lowest point since early August, as tepid demand expectations overshadow the reduction in supply. The sluggish progress of China's manufacturing sector has negatively impacted buying activities for major base metals. Industrial production in China slowed more significantly than anticipated, and both the official and Caixin PMI surveys indicated contractions in factory activities. Furthermore, consumer enthusiasm for taking advantage of relaxed monetary policies remained subdued, with new loans contracting and fixed asset investment decelerating. Despite these factors, Chinese aluminum production is set to slow this year, adhering to the annual cap of 45 million tons to address overcapacity and pollution control. Concurrently, there has been an uptick in demand within the EU, driven by increased defense investments among member countries. Simultaneously, US President Trump has expanded the list of tariffed aluminum imports by adding more goods categories.