Aluminium retreated on Thursday after touching its highest price in more than three months on Thursday as speculators turned negative when US inflation concerns grew on the back of comments by central bank officials. US stock markets fell broadly while bond yields surged to multi-year highs following robust US economic data and after Federal Reserve Chairman Jerome Powell said the economy can expand for "quite some time." "After the gains in metals over the last couple of days, specs probably thought this was a good time to cash out," a trader said.
Earlier, aluminium had been boosted by worries over potential shortages after Norsk Hydro announced the temporary closure of the Alunorte alumina refinery in Brazil, the world's biggest producer of the raw material to make aluminium.
But even before prices went into the red in the European afternoon, Capital Economics analyst Ross Strachan was wary, pointing out that the closure might not last long.
Hydro said on Wednesday it would halt production indefinitely and lay off 4,700 people at Alunorte, which has been operating at half of its capacity since March because of an environmental dispute.
"It almost makes you wonder if this is an attempt by the company to alleviate the situation by putting pressure on the government," Strachan said. "You would think that there will be a resolution to facilitate at least a significant restart, even if it's not able to go back to full capacity." Three-month aluminium on the London Metal Exchange closed open outcry trading down 1.7 percent at $2,169.50 a tonne, retreating from its highest since June 14 at $2,267.
Prices jumped 4.2 percent on Wednesday in its largest one-day gain since April. LME zinc finished closing rings up 0.2 percent at $2,654 a tonne, but later slid in after-hours electronic activity and was down 1.2 percent at 1617 GMT. Daily LME data showed zinc inventories rose 5,100 tonnes to 203,675 tonnes.
LME copper finished closing rings up 0.4 percent at $6,290 a tonne, but like zinc, it slipped into the red during late electronic trading. Earlier it had hit a peak of $6,393.50, the highest since July 10. Copper's spike higher was partly due to it breaking through technical levels, traders said.
"It has carved a base and is confirming a double bottom. It has re-tested July peak of $6,378 and could head towards the potential near $6,507/6,550," St?phanie Aymes, head of technical analysis at Societe Generale, said in a note. China's markets remain shut for the week-long National Day holiday. Nickel closed down 2.2 percent at $12,490, lead ended off 0.7 percent at $2,006 and tin edged down 0.1 percent to $18,975.
Comments
Comments are closed.