METALS-Aluminium outperforms copper on energy cost concerns amid US-Iran tensions

By Hongmei Li

SINGAPORE, June 23 (Reuters) - Aluminium prices outperformed copper on Monday, with the most-traded contracts on the London and Shanghai exchanges surging, as U.S. strikes on Iranian military sites drove up energy prices — a key cost factor for the energy-intensive metal.

The LME three-month aluminium contract CMAL3 rose as much as 3.3% to $2,634.5 per metric ton, before easing to $2,580.50, up 1.22%, by 0101 GMT. Meanwhile, the SHFE most-traded aluminium contract SAFcv1 was up 0.54% at 20,525 yuan ($2,859.23) a ton.

In comparison, LME copper CMCU3 gained 0.16% to $9,648.5, and SHFE copper SCFcv1 was up 0.31% at 78,420 yuan.

"Aluminium is more energy-price sensitive, so it has reacted more strongly to oil prices, and now the key is whether Iran will shut down the Strait of Hormuz," a Beijing-based metals analyst from a futures company said, requesting anonymity.

The Strait of Hormuz is crucial for bauxite and alumina shipments in the Middle East, and power accounts for 40% of the total cost in aluminium smelting, he said.

U.S. President Donald Trump on Sunday raised the question of regime change in Iran following U.S. strikes against key military sites over the weekend, as senior officials in his administration warned Tehran against retaliation.

Brent crude futures LCOc1 were up 2.44% at $78.89 a barrel, as of 1122 GMT, the highest since January.

LME zinc contract CMZN3 gained 0.5% to $2,643 a ton, lead CMPB3 inched up 0.1% to $1,994.5, and tin CMSN3 dipped 0.1% to $32,650.

SHFE tin SSNcv1 gained 1.2% to 263,950 yuan a ton, lead SPBcv1 gained 0.4% to 16,925 yuan, and zinc SZNcv1 went up 0.3% to 21,980 yuan.

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DATA/EVENTS (GMT)
0715 France HCOB Mfg, Services, Composite Flash PMI June

0730 Germany HCOB Mfg, Services, Composite Flash PMI June

0800 EU HCOB Mfg, Services, Composite Flash PMI June

0830 UK Flash Composite, Manufacturing, Services PMI June

1345 US S&P Global Mfg, Svcs, Comp PMI Flash June

1400 US Existing Home Sales May

($1 = 7.1785 Chinese yuan)

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