Salem Radio Network News Friday, December 9, 2022

Business

London aluminium hits 18-month low on demand concerns

By Mai Nguyen

(Reuters) -London aluminium prices dropped to their lowest in more than 18 months on Monday, as concerns of weakening demand and a stronger dollar weighed on the market.

Three-month aluminium on the London Metal Exchange fell as much as 1.2% to $2,139 a tonne, its lowest since March 2021. The contract has fallen nearly half from its record price of $4,073.50 hit just over six months earlier, on March 7.

The most-traded October aluminium contract on the Shanghai Futures Exchange fell to its lowest since Sept. 2 at 18,055 yuan ($2,524.47) a tonne.

Prices of the metal earlier this year were boosted by worries of supply disruption from major producer Russia after Moscow launched an attack on Ukraine, and exacerbated by several smelter closures in Europe due to spiking power costs.

However, with global central banks hiking rates, the global economic growth outlook weakened and the dollar hit a two-decade peak, hurting demand for metals that are priced in the greenback on the LME.

“High power prices and high interest rates threaten to undermine industrial production and hurt aluminium consumption. This has led to de-stocking, evidenced by the falling premiums across major regions,” said Citi analysts in a note.

“Looking ahead, end-use aluminium consumption will also feel the pinch during the next two quarters as Europe veers towards recession… Any announcement of further closures could see prices spike but we believe any such rallies would be unsustainable,” they added.

LME copper fell to its lowest since July 21 of $7,292.50 a tonne, zinc eased 0.9% to $2,982.50 a tonne at 0728 GMT, lead rose 0.7% to $1,816.50 a tonne and tin advanced 1.6% to $20,600 a tonne.

ShFE nickel dropped 3.7% to 187,500 yuan a tonne, tin fell 2.8% to 179,090 yuan a tonne, aluminium declined 3.5% to 18,075 yuan a tonne and zinc was down 2.8% at 24,280 yuan a tonne.

For the top stories in metals and other news, click [TOP/MTL] or [MET/L]

($1 = 7.1520 yuan)

(Reporting by Mai Nguyen in Hanoi; Editing by Rashmi Aich and Uttaresh.V)

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