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Shanghai aluminium hits 11-month low on firmer dollar, higher China exports

By Reuters News

Nov 11 (Reuters) - Shanghai aluminium prices fell for a second consecutive session on Wednesday to touch an 11-month low, pressured by a firmer dollar, a bump up in exports from China and some optimism about de-escalation in the Middle East conflict.

The most-traded aluminium contract on the Shanghai Futures Exchange fell 2.1% to 22,675 yuan ($3,399.4) a ton by 0221 GMT after hitting its lowest level since mid-December last year earlier in the session.

Benchmark three-month aluminium on the London Metal Exchange rose 0.6% to $3,028.50 a metric ton after hitting a three-week low on Tuesday.

The US dollar held gains near a two-week high, as a hotter-than-expected inflation report and hawkish comments from Federal Reserve officials fuelled bets the central bank will raise rates. A stronger US currency makes dollar-denominated metals more expensive for holders of other currencies. USD/

Data on Tuesday showed that China's exports of aluminium and aluminium products rose 18% to 5.9 million tons in January-October.

"Chinese trade data pressured prices. A stunning contribution to global supply at a time when it was needed most," said Marex analyst Ed Meir.

Meanwhile, declining aluminium stocks in LME-registered warehouses boosted the premium, or backwardation, on the near-term aluminium contract over the LME's three-month benchmark. ,

"Something will have to give; either prices need to move higher or the spread will have to come in. Difficult to say which one will win out for the moment," Meir added.

On the geopolitical front, Secretary of State Marco Rubio said on Tuesday he told G7 allies that the US' economic sanctions and naval blockade are working so well that President Donald Trump does not need to conduct major combat operations against Iran.

Among LME metals, copper added 0.8%, zinc rose 0.9%, lead firmed 0.5%, nickel gained 0.8% and tin lost 0.2%.

On the SHFE, copper dipped 0.3%, zinc rose 0.2%, nickel dipped 0.3% and tin firmed 1.7%.

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