LONDON: Prices of industrial metals came under pressure on Monday as worries about demand in top consumer China, where a power crunch and rationing is shutting factories, triggered selling.
The biggest loser was tin, which last week hit a record high at $36,830 a tonne on the London Metal Exchange, a gain of 75% since January. Prices of the soldering metal were down 4.2% at $35,000 a tonne at 1606 GMT.
"The power issue acts as a double-edged sword, hitting smelter production and leading to reduced supply," said ING analyst Wenyu Yao. "This is positive for metals prices. However, it is also affecting semi-fabricating and downstream consumers, which is negative for prices." Power usage curbs in China have cut demand for refined tin, as soldering companies and tin chemical producers in parts of the country are operating at reduced capacity, the International Tin Association (ITA) said.
CHINA: Widening power shortages in China have halted production at numerous factories including many supplying Apple and Tesla. Tight coal supplies and toughening emission standards have driven the power shortages across China.
NICKEL: Expectations of output curbs on stainless steel mills in China because of power shortages have undermined sentiment in the nickel market.
Two-thirds of nickel consumption is accounted for by the stainless steel industry, mostly located in China.
Nickel prices fell 2.2% to $18,950 a tonne.
INVENTORIES: Historically low stocks in China are helping to support copper prices.
Stocks in warehouses monitored by the Shanghai Futures Exchange fell last week for the seventh straight week to 44,629 tonnes, their lowest since June 2009.
In LME registered warehouses, copper stocks at 223,175 tonnes have fallen more than 10% since the start of September, while cancelled warrants - metal earmarked for delivery - stand at 44%.
Copper gained 0.4% to $9,370 a tonne.
OTHER METALS: Aluminium ceded 0.9% to 2,888, zinc was down 1.4% at $3,086 a tonne and lead added 0.5% to $2,165 a tonne.
Comments
Comments are closed.