LONDON: Aluminium prices fell to their lowest in more than three weeks on Monday as COVID-19 lockdowns in top consumer China fuelled worries about slowing demand for industrial metals.
Benchmark aluminium on the London Metal Exchange (LME) was down 4.1% at $3,235 a tonne at 1601 GMT. Prices of the metal used in transport, packaging and construction earlier touched $3,221, the lowest since March 17.
“Some investors may choose to take profits as the COVID restrictions hit aluminium demand in China. Smelters in Yunnan province have been ramping up production faster,” said ING analyst Wenyu Yao.
China is also the world’s largest producer of aluminium, accounting for nearly 58% of global supplies estimated at nearly 68 million tonnes last year.
“Total social inventories - almost all inventories reportable in China - have started to rise, weighing heavily on sentiment,” Yao said.
DEMAND: China has imposed lockdowns to contain the spread of the Omicron coronavirus variant in places including Jilin province and Shanghai, where factories of major automakers and their suppliers are located.
LOANS: Some support for base metals came from Chinese loan data, which showed that banks extended 3.13 trillion yuan ($492 billion) in new yuan loans in March, up sharply from February.
INVENTORIES: Low stocks of aluminium in LME-registered warehouses and in those monitored by the Shanghai Futures Exchange are expected to support prices.
However, the discount for the cash contract over three-month aluminium was last at $23 a tonne, against a premium in February, suggesting the market is not worried about supplies.
NICKEL: Prices of the stainless steel ingredient have mostly held in a range between $32,000 and $35,000 a tonne since trading resumed after a week-long suspension in March because of extreme volatility.
Nickel was down 4.2% at $32,440 a tonne.
ZINC: Prices of the metal used to galvanise steel have been driven higher by production cuts in Europe because of record high power prices as well as significant shortages and inventory draws.
Zinc rose 0.6% to $4,282 a tonne.
OTHER METALS: Copper fell 1.4% to $10,177 a tonne, lead slid 0.6% at $2,381 and tin ceded 0.6% to $43,435.
Comments
Comments are closed for this article.