Aluminium falls 3% on higher stocks

Print this page Posted on : 12-31-2008 by recycleinme.com

London, Dec 30

Aluminium fell as much as three per cent on Tuesday on demand concerns as inventories continued to soar and the weaker dollar offered little support.

Aluminium stocks in London Metal Exchange warehouses jumped 49,000 tonnes to above 2.3 million tonnes and have soared more than 475,000 tonnes this month alone.

''The focus is still on rising stocks and poor demand across the sector,'' said Mr Stephen Briggs, commodity strategist at RBS Global Banking & Markets. ''Most people think aluminium stocks are going to continue to rise for a few weeks yet.''

Aluminium for three-month delivery on the LME fell to a low of $1,465 a tonne. The metal traded at $1,485 a tonne in ring trading from $1,511 at the close on Monday.

Nickel, tin gain

Three-month copper, which has dropped almost 60 per cent this year, was also lower at $2,850 a tonne from $2,905.

Zinc prices, which peaked at $4,580 a tonne in November 2006, were trading at $1,123 a tonne compared with the last bid of $1,158 on Monday.

Lead was last bid at $920, unchanged from the close, nickel was bid at $9,925 from $9,700, while tin traded at $9,800 compared with the last bid of $9,750 a tonne on Monday.

''The outlook on the copper prices is bleak as fundamentals are weak,'' said analyst Mr Zoe Wang at China International Futures.

Copper inventories rose 650 tonnes to 337,350, the highest level since February 2004, as production cuts so far have failed to keep pace with lower demand.

Copper output from Chile, the world's biggest producer, fell 6.4 per cent in November from the year earlier.

Source : Business Line