Aluminum is experiencing its longest losing streak since April 2025, heading for a fourth consecutive weekly decline and poised for its worst monthly loss since 2008. The light metal is expected to lose around 7% for the current week. This downturn is attributed to several factors: a renewed selloff in Asian technology stocks, a strengthening US dollar, and the projected return of aluminum supplies from the Middle East.
The interim peace deal between the US and Iran has fueled expectations of renewed shipments from the Persian Gulf, a region that typically accounts for nearly a tenth of global aluminum production. The war had previously caused the shutdown of local smelters and disrupted the flow of metal and raw materials in and out of the area.
While the conflict initially led to concerns of widespread smelter shutdowns and a price surge above $4,000 a ton due to the closure of the Strait of Hormuz, the market's response was blunted by proactive measures from producers and Chinese supply. However, recent developments, including weaker-than-expected economic data from China and lingering questions about the peace deal's execution, have continued to weigh on prices.
Aluminum dropped to its lowest level since March due to weak Chinese consumer spending and investment data, which slumped to levels not seen since the pandemic. Investors are also assessing how quickly the Strait of Hormuz can reopen, even if a formal agreement between Iran and the US is signed. The metal tumbled more than 4% earlier in the month, alongside other commodities, as a bearish turn in equities, driven by technology stock rotations and hawkish comments from a Federal Reserve official, impacted market sentiment.
