Aluminium falls to 18-month low as markets brace for US rate rise

LONDON, Sept 21 (Reuters): Aluminium prices fell on Wednesday to their lowest since March 2021 as markets braced for another hefty U.S. interest rate rise that will suppress economic growth.

Rising rates helped boost the dollar to a 20-year high, pressuring dollar-priced metals by making them costlier for buyers with other currencies.

Also lifting the dollar was appetite for safer assets after Russia's Vladimir Putin escalated the conflict in Ukraine by ordering the mobilisation of more troops.

Benchmark aluminium CMAL3 on the London Metal Exchange (LME) was down 1.3% at $2,216 a tonne in official open-outcry trading and down 21% this year.

If the Federal Reserve announces a 0.75% rate rise at 1800 GMT, as the market expects, this has been priced in and could boost metals, but a 1% increase would likely drive prices lower, said ING analyst Warren Patterson.

Demand for metals is slowing alongside global economic growth but supply is also constrained, Patterson said.