LONDON: Industrial metals faltered on Tuesday as rising cases of the Omicron variant of COVID 19 dampened the economic outlook for top metals consumer China, but supply concerns underpinned prices.
Benchmark prices for aluminium shed 1.5% to $3,269 per tonne by 1225 GMT, after sinking 4.7% in the previous session. Three-month copper was up 1.1% to $9,823 per tonne.
China’s economy perked up in the first two months of 2022, with key indicators exceeding analysts’ expectations, however, a surge in Omicron cases, property weakness and heightened global uncertainties weighed on the outlook.
“There is a bit of a risk off sentiment in metals for the time being,” said Giancluadio Torlizzi, Managing Director at T-Commodity.
Aluminium set for big weekly fall as prices whipsaw
“We remain in bullish conditions for base metals, condition of supply remains tight,” he added, saying the declines in price would be well-supported by buyers looking for a bargain.
Concerns that Russia’s invasion of Ukraine would interrupt metal flows and raise the cost of gas has boosted metals prices, especially of aluminium and zinc, which are energy-intensive.
Russia produces about 6% of the world’s aluminium, 7% of global nickel and accounts for about 3.5% of copper supplies.
Nickel Trading: The LME will resume trading of nickel contracts at 8 a.m. London time on Wednesday March 16, after trading was halted a week ago following an unprecedented surge in prices.
Aluminium Supply: China’s daily aluminium output in January and February rose to its highest since mid-2021 despite pollution curbs in the heating season and during the Winter Olympics, as smelter hubs located away from the capital Beijing maintained operations.
Ukraine: Kremlin spokesperson Dmitry Peskov said it was too early to predict progress on talks over peace, which are due to resume later on Tuesday by video link.
Other Prices: Zinc shed 1.2% to $3,768 per tonne, lead was down 1.1% to $2,243, and tin slipped 0.6% to $42,320.
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