FX.co ★ Aluminum Falls from Over 3-Year High

Aluminum futures in the UK have descended to $3,100 per tonne, marking a notable decrease from the three-year high of $3,270 recorded on January 28th. This decline aligns with the broad-based retreat observed across base metals, as market participants reassessed their speculative positions. While trading volumes for base metals in China maintained unprecedented levels, this activity suggests that speculative traders in the region closed their positions following peak tests throughout the week. The downward movement coincided with a rebound in the U.S. dollar, spurred by the anticipation of a new Federal Reserve Chairman, who has historically advocated for reducing the Fed's balance sheet. Meanwhile, Microsoft's cautious outlook tempered expectations that increased datacenter investments would boost demand for base metals critical to infrastructure and electrification. Concurrently, global supply is anticipated to decelerate, particularly after China reached its 45 million-ton output cap last year. Furthermore, Chinese smelters exhibited hesitation in initiating new operations in Indonesia.