LONDON: Aluminium prices slipped on Wednesday after weak Chinese trade data fuelled worries about demand from the world’s top metals consumer, overshadowing the easing of COVID-19 restrictions in the country.
A weaker dollar, however, trimmed losses in aluminium and helped send others slightly firmer.
Three-month aluminium on the London Metal Exchange dropped 0.8% to $2,489 a tonne by 1620 GMT after giving up a similar amount on Tuesday.
Weighing on the market was data showing China’s exports and imports in November shrank at their steepest pace in at least 2-1/2 years.
LME aluminium has gained about 12% since the beginning of November, largely on hopes for a recovery of demand in China due to easing of coronavirus restrictions and measures to support the troubled property sector.
“From our perspective, we’re not expecting a sudden turnaround in China’s property market in the near-term,” said Edward Gardner, commodities economist at Capital Economics.
“We think perhaps this rally was a bit overdone and the fall in prices today is quite justified, coupled with the fact that global manufacturing and services PMIs are in contractionary territory as of November, in particular the new orders component.” Cushioning losses was news that China announced the most sweeping changes to its tough anti-COVID regime since the pandemic began three years ago.
Also providing some support was a weaker dollar index , making commodities priced in the US currency cheaper for buyers using other currencies.