LONDON: Aluminium hit a near 15-month low on Wednesday, heading for a 5 percent loss on the month, after data showed China’s manufacturing sector grew at its slowest pace since July 2016 and concerns lingered about excess Chinese supply.
Other metals also pulled back, with nickel hitting multi-month lows and zinc and lead dropping to their lowest in weeks.
The slowdown in Chinese factory growth in October comes during escalating Sino-U.S. trade tensions that have raised fears over growth in the world’s second largest economy and top metals consumer.
The dollar scaled 16-month highs against a currency basket , heading for its biggest monthly winning streak in more than 3 years. A strong dollar makes dollar-priced metals more expensive for non-U.S. investors.
“Aluminium’s fundamentals are weaker than other base metals like copper. There’s structural oversupply in the Chinese market and the fear of more (tariffs) from the United States is not helpful,” said Sergey Raevskiy, metals analyst at SP Angel.
PRICES: Three-month aluminium on the London Metal Exchange traded down 0.1 percent in official midday rings at $1,966, after touching an almost 15-month trough of $1,961. Nickel hit its lowest since mid December at $11,630 and traded down 0.8 percent in rings at $11,675.
Bellwether copper was last bid down 0.3 percent in rings at $6,015.
* COPPER TECHNICALS: “A glance at speculative positioning reveals that there is still further downside potential. Though speculative net long positions in copper on the LME fell last week, they ultimately remain firmly positive,” Commerzbank said in a note.
* NICKEL SUPPLY: Russia’s Norilsk Nickel, one of the world’s largest nickel producers, said its consolidated nickel production was at 53,739 tonnes in the third quarter of 2018, up 9 percent quarter-on-quarter.
* For a column on nickel click:
* CHINA’S YUAN: As China’s yuan approaches the 7 to the dollar barrier, investors are betting authorities will eventually let the currency fall beyond the historic level. Yet they are just as confident that China won’t allow the kind of capitulation seen in past market meltdowns.
* CHINA POLLUTION: Three cities in China’s top steelmaking province of Hebei have issued second-level or ‘orange’ pollution alerts, forcing industrial plants to cut output.
* LEAD INVENTORIES: LME data showed on-warrant or available lead stocks surging 17,825 tonnes to 101,450, after a jump of 19,075 tonnes yesterday. Available stocks are now at their highest since November 2017.
* OTHER PRICES: Lead traded down 2.7 percent in rings at $1,886, zinc traded down 0.8 percent at $2,529, while tin traded flat at $19,075.
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Source: Brecorder
