LONDON: Prices of aluminium and other industrial metals faltered on Wednesday on concern about surging Covid cases in top metals consumer China after it relaxed strict controls.
Three-month aluminium on the London Metal Exchange slipped 0.4% to $2,452.50 a tonne by 1700 GMT, trimming gains of 2% in the previous session.
“The situation in China regarding COVID is still pretty unclear,” said Geordie Wilkes, head of research at Sucden Financial.
“It’s getting clearer in terms of their approach to Covid, but what we’re seeing is a strong divergence between sentiment and actual fundamentals on the ground.” A week after China began dismantling its tough ‘zero-Covid’ controls, the World Health Organization warned of “very tough” times ahead and state media reported some seriously ill patients at hospitals in Beijing, raising fears of a wave of infections.
Declining physical premiums for copper suggest weaker demand, said Soni Kumari, a commodity strategist at ANZ Research.
The Yangshan copper premium has slid to $55.50 a tonne, the weakest since June, from $152.50 in October.
Investors were also nervous ahead of a meeting of the US Federal Reserve, which is expected to slow the pace of interest rate hikes.
“There are still large clouds overhanging the market. Whether the market is fully pricing in tighter monetary policy and whether there’s the prospect for stagflation is yet to be seen,” Wilkes said.
Source: Brecorder
