LONDON: Aluminium prices hit the lowest in almost five months and copper fell in London on Tuesday as concerns about demand in top consumer China and uncertainty about timing of interest-rate cuts worsened speculative sentiment towards industrial metals.
Three-month aluminium on the London Metal Exchange (LME) was down 1.7% at $2,212.50 per metric ton by 1345 GMT after hitting $2,209.50 for its lowest since March 1.
Copper fell 0.9% to $8,946, breaking below its 200-day moving average at $8,998. Chinese leaders signalled on Tuesday the stimulus measures needed to reach this year’s economic growth target will be directed at consumers, deviating from their usual playbook of pouring funds into infrastructure projects.
Signs of plenty of metals for near-term supply, continued woes of China’s housing sector, the lack of a meaningful recovery in its macro data and the lack of stimulus measures which would target the metals-consuming industries keep metals prices under pressure, said Standard Chartered analyst Sudakshina Unnikrishnan.
The dollar index was up, while the broader markets traded cautiously ahead of the US Federal Reserve meeting, pricing almost no chance of a rate cut on Wednesday, but betting on a rate reduction at the following meeting in September.
Copper, used in power and construction, is down 19% since a rally triggered by short covering and speculators’ bets on a potential long-term shortage of copper in the green energy transition took it to a record high of $11,104.50 on May 20.
Money managers’ net long positions on COMEX copper fell to 19,515 contracts on July 23 from 75,342 contracts on May 21, exchange data showed. However, suggesting that miners remain optimistic about copper’s longer-term prospects, BHP Group and Lundin Mining said they would buy Filo Corp, which is yet to start production at a copper deposit it develops in Latin America, for $3.25 billion.
Zinc was down 0.3% at $2,628.50, lead declined 1.6% to $2,035.50, tin dropped 1.9% to $28,600 and nickel rose 1.2% to $16,025.
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