Aluminum rose to a 4 month high and oil fell from a 7 year high

2022-02-10T14:34:54
Aluminum indices New York Mercantile Exchange Oil Oil prices Wall Street
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Aluminum rose to a 4 month high and oil fell from a 7 year high

Aluminum rose to a 4 month high and oil fell from a 7 year high: Aluminum managed to rise to a nearly 4-month high,
after some indices showed inventory deficit in America and Europe. 

Evest follows market developments in the following report.

Aluminum rose to a 4 month high

Oil declined after hitting a 7 year high

US stocks start the week higher

Asian trading

Aluminum rose to a 4 month high

Aluminum prices rose to a 4-month high on Monday as concerns about supplies from China, the largest producer,
and deficits in Europe and the United States were boosted by falling inventories.

The aluminum CMAL3 on the London Metal Exchange rose by 1% to $3105 per ton at 1136 GMT,

having hit its highest since Oct. 19 at $3,135 earlier in the session, up 20% since mid-December last year.

Analysts say Chinese authorities aiming to reduce pollution during the Winter Olympics limit production in heavy-energy aluminum smelters.

According to analysts, “there are few indications that Chinese supplies are returning quickly, with inventories falling and declining.”

The threat of sanctions against Russia, should it invade Ukraine, could also affect global supplies, with Russia,
the world’s largest aluminum producer outside China, consuming about 6% of global supplies.

China produces about 56% of world aluminum production estimated at 67 million tons last year.

The largest consumer is expected to experience a deficit of about 1.5 million tons this year.

And aluminum stocks are at 22-year lows of 768,250 in LME-approved warehouses, which is less than half the levels seen in March last year.

Oil declined after hitting a 7 year high

Oil prices are fell on Monday after hitting a seven-year high the previous day.

Brent crude futures for April on the London Futures Exchange declined by $0.77 (0.83%), to $92.5 per barrel.

West Texas Intermediate crude futures’ prices for March in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $1.2 (1.3%), to $91.11 per barrel.

Prices hit a 7-year high for the first time during Friday’s session due to continuing concerns about geopolitical risks ,
and the ability of OPEC to provide adequate supplies, as well as cold weather in the United States.

In the meantime, the deteriorating geopolitical situation in Eastern Europe led JPMorgan analysts to predict a scenario in which the price of Brent crude would rise to $120 per barrel.

According to analysts: “We cannot rule out prices rising to $100 per barrel in the short term, but there are still many negative risks,
including Omicron’s pressure on demand, fears of economic growth, as well as correction in financial markets amid the fight against inflation by central banks.”

US stocks start the week higher

On Monday, stocks started higher on Wall Street, where the gains of large tech companies like Amazon ,
were partially offset by losses elsewhere in the market, including healthcare stocks.

The S&P 500 rose by 0.2% early, and the tech-heavy Nasdaq rose by 0.8%. Dow Jones Industrial Index declined by 0.1٪.

Travel-related companies were generally higher.

Spirit Airlines index jumped 15 percent after the parent company Frontair Airlines agreed to buy the carrier in a $2.9 billion deal.

Oil prices declined and bond yields stabilized.

The 10-year Treasury yield was little changed at 1.93%.

Europe’s stocks rose after a mixed trading session in Asia, where the Shanghai benchmark index jumped after the reopening of the Lunar New Year holiday.

France’s CAC 40 rose by 0.2% in early trading, while Germany’s DAX and Britain’s FTSE 100 rose by 0.4% each.

Investors are also watching the movements of central banks in India, Indonesia and Thailand,

which are preparing to make a decision on monetary policy during the week.

 

Asian trading

In Asian trading, the Japanese Nikkei 225 index lost 0.7% to end at 27248.87. The Australian S & P/ASX 200 index fell by 0.1% to 7110.80. 

South Korea’s Kospi Index fell by 0.2% to 2745.06. Hong Kong’s Hang Seng index changed slightly,
rising by less than 0.1% to 24579.55, while the Shanghai Composite Index added 2% to 3429.58.

This week, some of the largest companies in the region will release profit reports, including Japanese automakers.

They may provide updates on the shortage of computer chips and other disorders and pressures related to the pandemic.

On Monday, Asian stock markets mostly declined after strikingly strong US jobs data allayed worries,
about the global economy but increased the risk of being severely narrowed by the Fed.

Geopolitics also remained a concern with the White House warning that Russia could invade Ukraine at any time,
and French President Emmanuel Macron prepared for a trip to Moscow.

Cautious markets saw MSCI’s broadest index of Asia Pacific stocks outside Japan decline by 0.1% in early trading.

Japan’s Nikkei index fell by 0.9% and South Korea by 0.8%.

The Chinese markets bounced back from the Lunar New Year holiday,
where Shanghai Composite rose by about 2% in morning dealings, tied to last week’s gains in global stocks.

The Hang Seng index, which returned from the break on Friday, was stable.

 

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