Make Kitco Your Homepage

METALS-Copper, aluminium fall after China scraps blanket winter output cuts

Kitco News

* GRAPHIC-2018 asset returns: (Adds official midday prices) By Maytaal Angel LONDON, Sept 27 (Reuters) - Copper hit its lowest level in nearly a week on Thursday while aluminium dipped, hurt by a stronger dollar and as an anti-pollution plan in China stopped short of imposing blanket production cuts on heavy industry this winter. The U.S. Federal Reserve hiked interest rates as expected on Wednesday, but did not hint at faster monetary tightening as some had expected. Still, the dollar eked out modest gains following the Fed move, making dollar-priced metals more expensive for non-U.S. investors. In China, Beijing ditched blanket production cuts on heavy industry in 28 northern cities in its finalised winter anti-pollution plan, allowing local authorities to adopt measures based on regional emission levels. Aluminium, the base metal most affected by the winter output curbs in northern China, dropped 1.7 percent in Shanghai but just 0.7 percent in official midday rings on the London Metal Exchange to trade at $2,051 a tonne.

LME copper was harder hit. It was last bid down 0.9 percent in rings at $6,234 a tonne having hit a low of $6,200. The metal has fallen for four consecutive days as investors close out positions ahead of a week-long holiday in China from Oct. 1.

With China copper premiums still at $120 a tonne, their highest since 2015, market commentators have highlighted the growing disconnect between strong physical demand and falling futures prices. Copper is down some 15 percent since hitting a 4-1/2 year high in June on worries over China-U.S. trade tensions and a rising dollar. "The reaction to the trade war has been overblown. We see copper higher by the end of next year, mostly on tightening supply. Also its role in greener technologies (means) demand is going to hold up," said Caroline Bain, senior commodities economist at Capital Economics.

* INDONESIA COPPER: Indonesia's energy ministry plans to hold a ceremony on Thursday linked to a $3.9 billion share purchase deal in which the government took a majority stake in the world's second-biggest copper mine.
* COLUMN: Copper's robust dynamics clash with futures gloom: Andy Home
* "The big disconnect between the shorts looking for another market crash and the reality of what is happening in the physical (copper) market continues to grow," Malcolm Freeman, director of Kingdom Futures, wrote in a note.
* ZINC TECHNICALS: Cash zinc traded at a premium of $14 a tonne to the three month price , indicating tight nearby supply. "Refined zinc does remain in deficit this year, despite the ramp up of a number of mines," said ING in a note.
* OTHER METALS: Zinc was last bid down 0.1 percent in rings at $2,537, lead was last bid up 0.2 percent at $1,988, tin was last bid up 0.4 percent at $18,950, while nickel was last bid down 0.7 percent at $12,725.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Top base and precious metals analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Tom Daly, Editing by Kirsten Donovan and Mark Potter)

Messaging: ))

LME price overview COMEX copper futures Base metals news All metals news All commodities news Metals diary Foreign exchange rates SPEED GUIDES ))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.