LONDON: Aluminium prices continued to decline on Wednesday as producers sold forward to secure high prices amidst uncertainty about China’s economic revival plans.
By 1048 GMT, three-month aluminium on the London Metal Exchange (LME) had dropped 0.9% to $2,547 per metric ton, following a 3.3% fall on Tuesday—the steepest daily drop in over five months.
According to Alastair Munro, senior metals strategist at Marex, the price pressure comes from both producer selling and long liquidation by funds. Further declines are likely if China fails to provide more clarity on its stimulus measures.
The lack of detailed information on new economic stimulus from China during a briefing on Tuesday led to market disappointment, triggering sharp corrections in both equities and commodities.
Attention now shifts to an upcoming briefing by China’s finance ministry on Saturday for potential economic guidance.
Meanwhile, physical demand for aluminium remains stable, with premiums for aluminium shipments to Japan rising by 1.7% to $175 per metric ton, according to Reuters. As a significant importer, Japan’s agreed premiums are often seen as an indicator of Asian demand.
The broader base metals market also experienced pressure on Wednesday. LME copper dipped 0.2% to $9,723 per ton, nickel declined 0.6% to $17,670, lead fell 1.3% to $2,075, zinc dropped 2% to $3,028.5, and tin decreased 0.4% to $32,745.
