LONDON: A month-long rally in metals paused on Wednesday as concerns over demand from top consumer China and a rebound in the U.S. dollar triggered sell-offs from funds and producers.
Three-month aluminium on the London Metal Exchange was down 1.9% at $2,501 a metric ton in official rings. It reached a eight-week high of $2,554 on Tuesday, up 12% since the start of August.
Systematic buying from funds paused in the metals space, with producers selling into the rallies, said Alastair Munro at brokerage Marex.
The senior metals strategist also cited disappointing performances across major metal-consuming industries in China, ranging from automakers to property developers and internet companies.
China’s weak factory output and low confidence in the country’s struggling property sector could reverse the upward momentum seen in the past month, he said.
Copper gains on US rate cut hopes
LME copper fell 1.9% to $9,269 a ton, zinc slid 2.5% to $2,870, lead was down 2% at $2,082.5 and nickel lost 1.8% to $16,835 while tin retreated by 2.6% to $32,375.
Also depressing metals prices was a recovery in the dollar from a one-year low as traders awaited economic data that could set the tone for the U.S. Federal Reserve’s September policy meeting.
The market is also nervous about a quarterly earnings report from AI favourite Nvidia later on Wednesday, Munro added. Any disappointment in the chip giant’s results would affect not only the equities market but also broader commodities, he added.
Source: Brecorder
