LONDON: Aluminium prices retreated on Wednesday as producers took advantage of a rally to sell metal and after an options expiry spurred higher volatility.
The metal’s benchmark price on the London Metal Exchange (LME) had jumped 3.9% on Tuesday, partly on worries that China, the biggest producer, could curb output to meet its ambitious goals to reduce greenhouse gases.
Three-month LME aluminium erased early gains and was down 0.5% at $2,200 a tonne by 1730 GMT (12:30 p.m. EST), having come within a whisker of last week’s peak of $2,243, its strongest level since October 2018.
“There is already evidence of producer selling,” Alastair Munro of broker Marex Spectron said in a note.
Investors were jittery ahead of this week’s annual Chinese parliament meeting, known as the “two sessions”, at which China will announce goals for 2021 as well as its next five-year plan for economic development.
“Decarbonisation and moving to the carbon neutral target will be a key focus at the two sessions in Beijing,” said Xiao Fu, head of commodity market strategy at Bank of China International in London, adding that this puts the energy-intensive aluminium and steel industries in the spotlight.
Shanghai aluminium prices rose to their highest in almost 9-1/2 years on Wednesday, with the most-traded April aluminium contract on the Shanghai Futures Exchange closing up 4.2% at 17,640 yuan ($2,729.09) a tonne.
LME nickel tumbled 7.2% to a seven-week low of $17,320 a tonne after LME inventories rose to their highest level since July 2018.
The expiry of LME options on Wednesday also spurred higher volatility, traders said.
LME copper slipped 0.5% to $9,122.50 a tonne, zinc shed 2.3% to $2,786.50, lead fell 1.5% to $2,048.50 and tin dropped 2% to $23,805.
Comments
Comments are closed for this article.