Aluminium prices plunged on Thursday leading a wider metals selloff as global equity markets tumbled and the Federal Reserve signaled a more hawkish monetary policy stance than expected. ING analysts Warren Patterson and Ewa Manthey noted the dramatic decline came amid broad risk-off sentiment sweeping financial markets. The selloff hit industrial metals hard as traders repositioned portfolios following the Fed’s hawkish signals, which typically strengthen the dollar and dampen demand expectations for commodities.
Despite the sharp near-term price decline, ING maintains its fundamental deficit view for aluminium remains unchanged. The bank’s analysts suggest current weakness reflects sentiment-driven selling rather than deteriorating supply-demand fundamentals. Traders and brokers working in metals and commodities markets faced significant volatility as the selloff accelerated through trading sessions. The move particularly impacts aluminum producers, industrial consumers, and derivatives traders holding long positions in base metals.
FXnCO Insight
Current aluminium weakness presents potential tactical buying opportunities for traders with medium-term horizons, as ING’s unchanged deficit outlook suggests fundamentals may support price recovery once risk sentiment stabilizes.
Source: FXStreet