Aluminum hits its lowest level in 11 months on the Shanghai Stock Exchange

Aluminum prices fell on the Shanghai Stock Exchange for the second session in a row, on Wednesday, to record their lowest levels in 11 months, under pressure from the rise in the dollar and the increase in China’s exports, in addition to growing optimism about calming the conflict in the Middle East.

The most traded contract for aluminum on the Shanghai Futures Exchange fell by 2.1 percent to 22,675 yuan ($3,399.4) per ton, by 02:21 GMT, after recording earlier in the session its lowest level since mid-December last year, according to Reuters.

On the other hand, the standard aluminum price, for a period of 3 months, on the London Metal Exchange rose by 0.6 percent to $3,028.50 per ton, after recording its lowest level in 3 weeks on Tuesday.

The US dollar maintained its gains near its highest level in two weeks, supported by data that showed inflation rising more than expected, and tough statements by Federal Reserve officials, which strengthened the markets' bets on raising interest rates. The rise in the dollar increases the cost of metals denominated in the US currency for holders of other currencies.

Data released on Tuesday showed that China's exports of aluminum and its products increased by 18 percent to 5.9 million tons during the period from January to October.

Ed Meier, an analyst at Marex, said that Chinese trade data put pressure on prices, adding that it represented a “remarkable contribution to global supplies, at a time when these supplies were most needed.”

On the other hand, the decline in aluminum stocks in warehouses approved by the London Metal Exchange contributed to an increase in the premium for short-term contracts, or what is known as the “backorder” condition, compared to the standard 3-month contract.

Mir added: “Some change must happen; Either prices rise, or the price gap between contracts shrinks. It is difficult at the present time to determine which of the two trends will prevail.

On the geopolitical level, US Secretary of State Marco Rubio said on Tuesday that he informed his country’s allies in the Group of Seven countries that US economic sanctions and the naval blockade are achieving effective results, to the extent that President Donald Trump no longer needs to carry out broad military operations against Iran.

In London Metal Exchange trading, copper rose by 0.8 percent, zinc by 0.9 percent, lead by 0.5 percent, and nickel by 0.8 percent, while tin fell by 0.2 percent.

As for the Shanghai Stock Exchange, copper fell by 0.3 percent, while zinc rose by 0.2 percent, nickel fell by 0.3 percent, and tin rose by 1.7 percent.

Attention at the United Nations Climate Change Conference (COP 31), held in the Turkish city of Antalya, is directed to the level of political attendance of international leaders, with the absence of a number of the most prominent world leaders from the summit, despite the escalating repercussions of climate change and increasing pressure on governments to take more effective steps to confront the crisis.

Dozens of leaders are scheduled to deliver their speeches during the high-level segment of the conference, on Wednesday and Thursday, led by Turkish President Recep Tayyip Erdogan, Brazilian President Luiz Inacio Lula da Silva, and Iranian President Masoud Pezeshkian.

But the attendance list is missing a number of prominent leaders; British Prime Minister Andy Burnham is the only G7 leader scheduled to address the conference. While European Commission President Ursula von der Leyen heads to Antalya, French President Emmanuel Macron, German Chancellor Friedrich Merz, and Italian Prime Minister Giorgia Meloni are absent, along with Canadian Prime Minister Mark Carney and Japanese Prime Minister Sanae Takaichi.

Cosima Castle, a specialist in climate diplomacy at the E3G Research Center, said that the absence of some prominent European leaders is unfortunate, stressing Europe's need for a strong presence at the conference, according to Agence France-Presse.

On the other hand, European Climate Commissioner Fopke Hoekstra said that the absence of some leaders is not completely exceptional; Practical reasons may prevent them from participating in international summits. But he acknowledged that expectations regarding the conference's results were not necessarily high.

For his part, Iranian President Masoud Pezeshkian said, before his departure for Türkiye, that he would take advantage of his participation to express Tehran’s position on the environmental damage resulting from wars. Pointing out that he will talk about the role of the United States and Israel in destroying the environment, according to Iranian official television.

The French government explained that Macron's absence was due to his association with the commemoration of the Armistice of World War I on November 11, in addition to his participation in a European summit in Ireland on Thursday.

Chiara Martinelli, Director of the Climate Action Network in Europe, said that the presence of leaders represents an essential step to influence the path of global transformation in the energy sector, expressing her fear that von der Leyen will find herself alone on the conference platform in the absence of the leaders of the largest European economies.

Absence of America and China

US President Donald Trump will be absent from the conference, in light of the United States’ withdrawal from the Paris Climate Agreement and has not sent officials to the climate talks since his re-election in 2024.

Chinese President Xi Jinping, who rarely attends climate conferences, also does not participate; His country was represented at the summit by Vice President Han Zheng.

The absence of Washington and Beijing is of particular importance, as they are the two largest economies in the world and the largest sources of emissions that cause global warming, which makes their participation an essential factor in the course of climate negotiations.

On the other hand, the presence of Brazilian President Lula da Silva represents a prominent point in the summit. Climate activists welcomed his victory over his right-wing rival, Flavio Bolsonaro, in the Brazilian presidential elections last month, given his adoption of policies to reduce deforestation.

Turkey, the host country of the conference, seeks to push a voluntary initiative to accelerate the transition towards electricity in the transportation, buildings and industry sectors, aiming to raise the share of electricity in total global energy consumption to 35 percent by 2035.

The European Union stressed the need for the process of expanding the use of electricity to be based on clean sources, which may open a discussion about the role of oil, gas and coal in the Turkish initiative.

Since the agreement reached for the first time by the countries participating in the COP28 conference in 2023 to transition away from fossil fuels, as the main driver of climate change, the annual negotiations have faced difficulties in achieving tangible progress towards implementing this goal.

Britain faces a longer period of high inflation; The Bank of England will not be able to return inflation to its target of 2 percent before the end of 2030, according to expectations of the National Institute of Economic and Social Research, which attributed the continued inflationary pressures to the indirect repercussions of the Iran war, especially the impact of rising energy prices on wages.

In a report issued on Tuesday, the institute expected inflation to peak at 4.4 percent in February 2027, compared to its previous forecast of 3.8 percent issued in July. He expected that inflation would remain higher than the Central Bank's target during the years 2027, 2028 and 2029, before returning to the target level in late 2030, that is, a year after its previous estimates.

David Aikman, director of the institute, said that the British economy showed a better performance than expected during the current year, but it is now facing dual pressures represented by rising energy prices and increasing global borrowing costs, adding that how monetary and financial policies respond to these challenges remains an internal decision, but taking the necessary decisions is being postponed on both fronts.

The institute raised its forecast for British economic growth in 2026 to 1.6 percent, compared to a previous estimate of 1.1 percent, supported by increased government spending and corporate investment, part of which is driven by artificial intelligence.

On the other hand, growth is expected to slow to 1.1 percent in 2027, then to 0.9 percent in 2028. The unemployment rate is also likely to rise gradually from 4.8 percent in 2026 to a peak of 5.1 percent in 2031, while average wage growth is expected to reach 3.9 percent over the next three years.

With regard to public finance, the Institute considered that the October budget presented by Finance Minister John Healey made little progress in strengthening public finances. Pointing out that difficult decisions related to taxes and spending have been postponed, and that plans aimed at reducing borrowing lack credibility.

On the monetary policy front, markets are currently pricing in two or three interest rate increases, each at a quarter of a percentage point, until the end of next year. But the institute expects the Bank of England to raise interest rates only once, next February.

The institute indicated that bringing inflation back to the central bank's target in the medium term may require raising borrowing costs to about 5 percent.

The Bank of England raised interest rates last week from 3.75 to 4 percent, the first increase in more than 3 years.