Aluminium Surges on Sanction Worries While Copper Gains on China Hopes

ALUMINIUM - LONDON. Aluminium prices jumped on Tuesday on worries over potential EU sanctions while copper pushed higher on hopes that top metals consumer China will unleash more stimulus to boost its economy.

Three-month aluminium on the London Metal Exchange (LME) jumped by 3.2% to $2,228 a metric ton by 1510 GMT for the biggest daily percentage gain in a month.

The metal used in construction, transport and packaging spiked after Poland and the Baltic states called for the European Union to ban imports of Russian aluminium and liquefied natural gas.

Benchmark LME copper rose 0.8% to $8,411.50 a metric ton after edging lower on Monday.

China's cabinet on Monday pledged more fund injections in the capital market to stabilise market confidence. One option included mobilising about 2 trillion yuan ($278.9 billion) to bolster the stock market, Bloomberg News reported.

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"The speculation about life support to the stock market is aiding sentiment. It's got the renminbi trading stronger and that's feeding through to some better price action," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Positive technical signals were also in place, with copper having broken above both the 200-day moving average and a downtrend in place since Dec. 28, when it touched its highest in nearly five months, he added.

Hansen also flagged the prospect of a short-covering rally if copper made further gains after many speculators took bearish bets over the past two weeks. Many of those were on the U.S. Comex market, with the biggest bet on lower prices since July 2022.

"All these shorts haven't much to show for their efforts, so that raises the prospect of some short-covering if we can break above the $3.80 level," Hansen said.

U.S. Comex copper futures gained 1% to $3.80 a lb.

Among other metals, LME zinc climbed 2.8% to $2,526 and nickel advanced 1.9% to $16,315. Lead gained 2.1% to $2,169 for its highest in nearly two months while tin jumped 2.3% to a four-month peak of $26,210.