LONDON: Aluminium prices sank to the lowest in three weeks on Thursday and other industrial metals also fell on worries that lockdowns in China and tighter monetary policies will crimp metals demand.
Benchmark aluminium on the London Metal Exchange had shed 1.4% to $3,393 by 1640 GMT after touching the lowest since March 17. “There are a lot of headwinds for the metals markets. The Chinese lockdowns are troubling and the Fed minutes last night were pretty aggressive and the dollar has responded,” said independent consultant Robin Bhar.
“The conflict in Ukraine, as well as being worrying, is going to have some impact on demand destruction with prices at these higher levels, and also impact global growth.” China’s financial hub Shanghai has fallen largely silent after the city imposed harsh movement restrictions to stem the spread of COVID. The curbs have stretched into an 11th day, stoking public discontent.
The most-traded May aluminium contract on the Shanghai Futures Exchange ended daytime trading down 3.5% to 21,815 yuan ($3,429.98) a tonne. “Given already high prices and renewed growth concerns around central bank tightening, I’d say we could expect volatility to continue. Speculators may see this as a time to take some profits and reposition,” said Thomas Westwater, an analyst at DailyFX.
The dollar held near a two-year high on hawkish comments from Fed officials, making greenback-denominated metals more expensive to buyers using other currencies. Trading inventories of aluminium in China, used widely in construction, transportation and consumer goods,
“The stockpiling of billet and other downstream products have significantly increased due to the logistics bottleneck due to the COVID outbreak (in China),” said Xinlin Chen, senior consultant at Wood Mackenzie. Indonesia’s refined tin exports in March stood at 6,674.91 tonnes, up 10.45% from a year earlier, trade ministry data showed.
In other metals, LME nickel rose 1.1% to $33,820 a tonne, but copper fell 0.2% to $10,282.50, zinc dropped 2.4% to $4,170, lead slipped 1.6% to $2,374 and tin declined 0.8% to $43,520.
Comments
Comments are closed.