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

By Hongmei Li

SINGAPORE, June 23 (Reuters) - The most-traded aluminium contract on the London Metal Exchange outperformed copper on Monday 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 was up 0.82% at $2,570.5 per metric ton by 0700 GMT. The most-traded aluminium contract SAFcv1 on the Shanghai Futures Exchange dipped 0.24% to 20,365 yuan ($2,833.79) a ton, after an initial gain in line with LME aluminium.

In comparison, LME copper CMCU3 rose 0.07% to $9,640 and SHFE copper SCFcv1 was up 0.14% at 78,290 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.

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.

President Donald Trump on Sunday raised the question of regime change in Iran following U.S. strikes on 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 0.7% to $2,648 a ton, lead CMPB3 gained 0.35% to $1,999, while tin CMSN3 dipped 0.7% to $32,465, and nickel CMNI3 fell 1.1% to $14,850.

SHFE tin SSNcv1 gained 0.4% to 261,880 yuan a ton, lead SPBcv1 gained 0.4% to 16,920 yuan, zinc SZNcv1 was up 0.3% at 21,980 yuan, while nickel SNIcv1 fell 1.1% to 117,440 yuan.

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DATA/EVENTS (GMT)
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 = 7.1865 Chinese yuan)

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