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METALS-Aluminum extends losses as recession outlook weighs on demand


(Adds analyst commentary, details and LONDON deadline, updates prices)

By Eric Onstad

LONDON, June 14 (Reuters) – Aluminum prices deepened losses on Tuesday as investors feared further shutdowns in top consumer China and a possible global recession would reduce demand for the metals.

three month aluminum on the London Metal Exchange was down 0.5% at $2,614 a tonne, as of 0930 GMT, after falling 1.9% on Monday to its lowest level since December 15.

July’s most traded aluminum contract in Shanghai
ended day trading 1% lower at 20,005 yuan ($2,976.93) a tonne, after falling to its lowest since May 11 earlier in the session.

“There is a general lack of risk appetite at the moment and metals are in the firing line due to downside risks to demand,” said Ole Hansen, head of commodities strategy at Saxo. Bank in Copenhagen.

“There are also nervous exchanges ahead of the FOMC meeting tomorrow.”

Eroding inflation data and rapidly shifting sentiment in financial markets opened the door to a larger-than-expected interest rate hike of three-quarters of a percentage point at the officials’ meeting. the Federal Reserve this week.

Meanwhile, concerns over demand from major metal consumers in China have been reignited due to new COVID-19 lockdowns.

The Chinese capital Beijing must race against time to block the spread of a COVID-19 outbreak linked to a local bar, an official said on Tuesday.

Losses in some metals, however, were cushioned by lower inventory levels and tighter supply, Hansen added.

“Inventory levels held by the London and Shanghai stock exchanges are still low, so how do you reconcile this with falling prices in anticipation of lower demand? That’s the conundrum the market faces. .”

LME copper was stable at $9,294.50 per tonne.

* Offering some support, the dollar index dipped, consolidating gains near a 20-year high, making dollar-denominated metals cheaper for buyers using other currencies. [USD/]

* Argentina said on Monday it would introduce a new optional tax regime for copper producers that could potentially reduce export duties in a bid to revive domestic production.

* Ghana is on a road trip to find a strategic partner to rebuild the aluminum smelter of Volta Aluminum Co.

*Zinc LME rose 0.5% to $3,631 per tonne, but
slipped 0.5% to $2,088, nickel fell 1.4% to a three-month low of $25,560, and tin fell 6.9% to $30,615, the lowest in nearly a year.

($1 = 6.7345 Chinese yuan) (Reporting by Eric Onstad; Additional reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips) ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net)) ((For related news and awards click on the codes in brackets: LME award overview

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