Metal stocks continued their downward trend in Hong Kong trading. At the time of writing, ZIJIN MINING (02899) fell 5.9% to HK$33.52, MMG (01208) dropped 5.36% to HK$7.41, CMOC (03993) declined 3.93% to HK$16.64, and CHALCO (02600) decreased 3.48% to HK$10.81.

The ongoing Middle East conflict has evolved into a prolonged standoff, persistently driving up energy prices and subsequently raising inflation concerns in the market. Against this backdrop, the Federal Reserve maintained interest rates unchanged during its March meeting, causing market expectations for rate cuts this year to diminish significantly. Current pricing indicates less than one rate cut anticipated for the year, strengthening both the US dollar and Treasury yields, which in turn has exerted substantial pressure on valuations of non-ferrous commodities including copper.

Nanhua Futures noted that geopolitical factors remain the core driver for aluminum prices recently, though shifting market focus has resulted in initial price gains followed by declines. During the first two weeks of the conflict, aluminum supply disruptions in the Middle East became the primary focus for aluminum futures trading. Production cuts at Qatar Aluminum and shipment suspensions at Bahrain Aluminum triggered significant price increases. However, as the conflict prolongs with no immediate signs of de-escalation from either side, rising crude oil costs combined with absence of new production cut announcements from Middle Eastern smelters have shifted market concern toward economic recession and liquidity pressures, leading to weaker and more volatile aluminum prices.