LONDON, May 29 (Reuters): Aluminium prices hit their highest in nearly two years on supply tightness and surging buying interest from funds switching from copper.
Three-month aluminium on the London Metal Exchange (LME) was up 0.4 per cent at $2,739 at 1127 GMT after peaking at $2,778 for its highest since June 9, 2022.
"Investors have been selling copper and buying aluminium this week," said senior Marex metals strategist Alastair Munro. "Aluminium is the outperformer and is playing catch-up."
LME aluminium has gained 15 per cent this year, versus a 22 per cent rally in copper, which last traded down 0.7 per cent at $10,426.
Munro expects a continued inflow of "wider money" into metals, providing further support for aluminium. He also said investors had boosted buying of aluminium call options at strike prices above $3,000.
One global aluminium producer has offered Japanese buyers a premium of $175 a metric ton for July-September, up 18 per cent to 21 per cent on a quarterly basis, demonstrating confidence in the demand outlook.
Japan is a major buyer of the metal widely used in transportation, construction and packaging. The premiums it agrees to pay each quarter over the LME price set the benchmark for Asia and are a gauge of physical demand.
In other metals, LME nickel added 0.1 per cent to $20,490 a ton, zinc was up 0.5 per cent at $3,114.50, tin rose 0.2 per cent to $34,005 and lead was down 1.2 per cent at $2,314.50.
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