Off The Wire
Grim demand outlook pushes copper prices to 2-month low
LONDON, Sept 26 (Reuters) - Copper prices fell to two-month lows on Monday as fears of a global slowdown, weaker demand, a higher dollar and climbing stocks in London Metal Exchange (LME) registered warehouses sparked a sell-off.
Benchmark copper on the LME traded down 1.2% at $7,347 a tonne in official rings. Prices earlier hit $7,292.5, the lowest since July 21.
"Doom and gloom about growth and repercussions for demand, the stronger dollar and inventory increase are pressuring the base (metal) complex," a metals trader said.
The OECD said global growth is slowing more than was forecast in the wake of Russia's invasion of Ukraine, as energy and inflation crises risk snowballing into recessions in major economies. read more
Stocks of copper in LME warehouses at 129,000 tonnes are up more than 25% since Sept 15, while cancelled warrants - metal earmarked for delivery - are at around 7% compare with 50% in late August.
The dollar against a basket of other major currencies is near its highest since May 2002, making dollar-denominated metals more expensive for holders of other currencies, which also weighs on demand.
Aluminium prices fell to 18-month lows of $2,139 a tonne, down 50% since a record high of $4,073.50 a tonne when the market tried to price in disruptions to Russian supplies due to the war in Ukraine.
Exacerbating concerns about supply were production cuts in Europe due to record high energy prices.
But now analysts say aluminium consumption and prices will remain under pressure due to slowing growth.
"End-use aluminium consumption will also feel the pinch during the next two quarters as Europe veers towards recession," Citi analysts said in a note.
An aluminium production ramp-up in top producer and consumer China is also weighing on prices. read more
Aluminium was down 0.9% at $2145, zinc fell 2.6% to $2,930, lead slid 3% to $1,750, tin gained 0.8% to $20,400 and nickel tumbled 4.7% to $22,315 a tonne.