Aluminium prices hit near 6-month low on China lockdowns, growth fears


hit their lowest in nearly six months on Friday and copper also dropped as investors fretted over the prospect of weak economic growth hitting metals demand after renewed COVID-19 lockdowns in and increases to interest rates.


Three-month aluminium on the London Metal Exchange (LME) slid 2.8% to $2,685 a tonne by 1400 GMT after touching the lowest since December last year.


“Price pressure is due to uncertainty on growth prospects, weaker demand from the auto sector as well as the ongoing recovery in China’s domestic output,” analyst Sudakshina Unnikrishnan at Standard Chartered Bank said in a note this week.


Copper fell 1.6% to $9,458 a tonne after dropping 1.2% in the previous session.


“Copper is coming under several sorts of pressure. The lockdowns aren’t ending as quickly as hoped and China’s zero-COVID policy is very damaging for economic growth,” said Nitesh Shah, commodity strategist at exchange-traded fund provider WisdomTree.


“You’ve also got central banks in other parts of the world maintaining a very hawkish tilt and that puts into question whether economic growth outside of is going to decelerate faster.”


China’s commercial hub will lock down millions of people for mass COVID-19 testing this weekend, only 10 days after lifting its gruelling two-month lockdown.


Other risky assets also fell, with equities hitting a two-week low as the European Central Bank interest rate outlook and higher-than-expected U.S. consumer price data for May stoked concerns over global growth.


* The dollar index climbed to a three week high, making greenback-denominated metals more expensive for buyers using other currencies.


* China’s factory-gate inflation cooled in May, official data showed, depressed by weak demand for steel, aluminium and other industrial commodities because of tight COVID-19 curbs.


* LME nickel lost 2% to $27,450, zinc eased 1% to $3,725.50, lead fell 1.8% to $2,156 and tin tumbled 4.2% to $35,200.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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