Aluminium at 7- week low in LME trade

Print this page Posted on : 01-29-2010 by recycleinme.com

London, Jan. 28

Copper fell on Thursday as ongoing worries over possible monetary tightening in China overshadowed US President, Mr Barack Obama’s softer rhetoric on plans to regulate banks. Other metals declined sharply, with aluminium hitting a seven- week low and zinc and lead touching multi- month lows.

Benchmark copper for three- month’s delivery on the London Metal Exchange traded at $ 7,085 a tonne at 1045 GMT from a close of $ 7,230 on Wednesday. Obama eased market worries about moves to limit bank risk- taking by not revealing concrete plans on the issue in his annual State of the Union address. Instead, he pledged to curb exploding deficits, boost job growth by doubling exports in five years and pursue his healthcare reform plans.

What he didn’t say probably was construed as positive, he didn’t specifically talk about bank regulation,” said Calyon analyst, Mr Robin Bhar.

But he added metals were still under pressure from concern over monetary policy in China, the world’s largest commodities consumer.

Investors have been unnerved by the speed of China’s attempts to rein in excessive credit growth this year since it announced on Jan. 12 that it was raising domestic banks’ reserve requirement ratios by 0.5 per cent point.

China’s largest bank, ICBC, said on Wednesday it had stopped rolling over some loans to slow credit growth after a surge at the start of the year.

“ Chinese moves are having more impact but I don’t see this as too unnerving, they’re tightening because the economy is doing much better than the government expected,” said Mr Bhar.

STOCKS WEIGH

Also weighing on copper was a rise in LME copper inventories of 1,575 to 540,175 tonnes — the highest level since February last year.

The relentless rise in stocks indicates physical demand for copper remains weak outside China, sparking worries over what will happen if Chinese imports wane this year.

Copper rose 140 per cent last year, driven by record import demand from China, strong fund flows, a weakening dollar and a global recovery from recession.

In other metals traded, zinc fell to a twomonth low of $ 2,171 a tonne, and was later trading at $ 2,189 a tonne from $ 2,236, while lead hit $ 2,045, its lowest since mid- September last year, and was later trading at $ 2,084 a tonne from $ 2,125.

Sapping even more positive sentiment in zinc was Australia’s giant Century zinc mine, which said production will rebound in 2010 after technical problems cut output in 2009.

LME aluminium, used in transport and packaging, sank to a 7- week low of $ 2,127 a tonne, and was later trading at $ 2,159.75 a tonne from $ 2,180. In other metals traded, tin was at $ 17,850 from $ 17,850, and nickel was at $ 18,115 from $ 18,195.

Source : Business Line