Aluminum hits 5-month low due to demand issues; copper rebounds -
LONDON - Aluminum fell to nearly five-month lows on Tuesday as funds betting on lower prices due to slowing demand initiated a wave of selling, but concerns about production cuts in Europe due to energy costs ultimately supported the metal.
* Traders said funds had been selling for several days, initially to reduce their long positions and more recently betting on lower aluminum prices, as the latest data from China showed a decline in manufacturing activity.
* The benchmark aluminum price on the London Metal Exchange (LME) rose 0.15% to $2,759 per ton at 1722 GMT, after trading at a session low of $2,697.5 per ton, the lowest level since December 21.
* "The potential for Chinese and global demand to be so weak (...) points to the need for caution in the short term," said Max Layton, an analyst at Citi.
* But threats to aluminum supply remain high, with around 1.5 million to 2 million tons of production at risk of closure in Europe and Russia over the next three to 12 months, Layton said.
* The figure represents around 2% of global aluminum supplies, estimated at around 70 million tons for this year.
* Meanwhile, copper futures in London fell 0.13% to $9,225.50 per ton, extending losses a day after a sharp sell-off in the industrial metals market.
* China's economy has been hit as authorities rush to stop the spread of record COVID-19 cases, leading to full or partial lockdowns in dozens of cities.
* Among other base metals, zinc fell 1% to $3,577 per ton, lead fell 1.9% to $2,113 per ton, tin sank 5.4% to $35,100 per ton, and nickel gained 0.6% to $28,350 per ton.
* To view the latest prices for base metals:
- COPPER
- LEAD
- TIN
- NICKEL
- ALUMINUM
- ZINC
Reuters news.
