SHANGHAI, Sept. 1 (Xinhua) — Aluminum futures on the London Metal Exchange (LME) fell to the lowest level in 16 months on Thursday, and prices of other metals also fell heavily as major metals consumer China released pessimistic manufacturing data, triggering market concerns about weak demand.
At 19:35 GMT, LME three-month aluminum futures were down 2.35% at $2,303.50 a tonne, having earlier touched a low since April last year.
China’s manufacturing boom fell to contraction territory in August due to recurring local epidemics and tight power supply caused by high temperatures and little rain.
The Caixin China Manufacturing Purchasing Managers’ Index (PMI) released on September 1 recorded 49.5 in August, down 0.9 percentage points from July and dropping below the Ronggu line, indicating that the manufacturing sector is back to contracting after two months of expansion.
“Industrial metals are taking a beating. Concerns about economic growth will certainly have a profound impact on the overall market and reduce risk appetite again,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Surveys show weak global manufacturing activity, while Hansen said the market is also under pressure from expectations that the European Central Bank will raise interest rates next week.
“The same challenges are still likely on the supply side of the metal, but the focus is now on the risk to demand from central bank action,” Hansen said.
He added that investors are selling off some of their long positions in the energy-intensive metals aluminum and zinc. Many analysts previously expected the two metals to outperform the broader market as they cut production due to high electricity prices.
LME futures tin prices fell heavily to a 19-month low, last reported down 6.29 percent at $21,360 a ton.
A Chinese trader said, “Tin prices lost support after an increase in tin production in August and continued weak demand from major end-user industries such as electronics.”
“High overseas inventories and an open arbitrage window could mean increased supply in the Chinese market later this month.”
Three-month copper futures fell 1.67 percent to $7,671 a tonne. Three-month zinc fell 6.5 percent to $3,234.50 a ton. Three-month nickel fell 3.32 percent to $20,700 a ton.
Post time: Sep-02-2022