Home >Markets >Commodities >Aluminium, zinc edge up on signs of tighter China supply
 (Reuters)
(Reuters)

Aluminium, zinc edge up on signs of tighter China supply

  • Three-month aluminium on the London Metal Exchange rose 0.6% to $1,864 a tonne
  • Copper slipped 0.3% to $5,962 as the dollar held near a 3-week high and global equities slumped after the IMF warned of a darkening growth outlook

London: Aluminium prices rose on Tuesday while zinc matched last week's one-month high as investors brushed off a strong dollar and weaker economic growth in China to focus on that country's slowing production of the two metals.

Trading volumes were thin ahead of the Lunar New Year holiday, which will see China shut down for a week.

"We're heading into softer seasonal flows (but) nearly 3 million tonnes of (Chinese aluminium) smelting capacity has closed and inventories are drawing on a counter-seasonal basis. For zinc, Chinese production remains very weak," Deutsche Bank metals strategist Nick Snowdon said.

He added, however, that broadly for metals, the story was one of price stagnation largely because of the standoff between poor macroeconomic data and upside policy risk such as further stimulus in China.

China's economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising US tariffs, dragging 2018 growth to the lowest in nearly three decades and pressuring Beijing to roll out more stimulus.

Aluminium, Zinc: Three-month aluminium on the London Metal Exchange rose 0.6% to $1,864 a tonne by 1128 GMT, the strongest gainer in an otherwise lacklustre LME metals complex. Zinc edged up 0.1% to $2,591.50, having matched last week's one-month high of $2,595.

■ China Aluminium: "The question is how long China can maintain (its) recent record-high production rate given aluminium prices have dropped considerably and Chinese smelters are currently chalking up average losses equating to $145 per tonne," Commerzbank said in a note, citing data from Shanghai Metals Market.

■ Copper: Bellwether copper slipped 0.3% to $5,962 as the dollar held near a three-week high and global equities slumped after the International Monetary Fund (IMF) warned of a darkening growth outlook on Monday.

■ US-China: The United States will proceed with the formal extradition from Canada of Huawei executive Meng Wanzhou, Canada's ambassador to the United States told the Globe and Mail, in a move certain to ratchet up tensions with China.

■ BHP: Global miner BHP Group raised its 2019 copper production forecast to between roughly 1.6 million and 1.7 million tonnes.

■ Warehousing: Years after sweeping reform aimed at eliminating logjams in warehouses that collect rent for storing metal, a firm is preventing companies from getting material when they need it from a Malaysian port, five sources close to the matter said.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePapermint is now on Telegram. Join mint channel in your Telegram and stay updated

Close
×
My Reads Redeem a Gift Card Logout