Industrial metals lead, zinc and tin fell sharply on Thursday, hit by waning demand and rising stockpiles in warehouses. Tin was the biggest loser, falling $2,600 or more than 10 percent to close at $21,100 per tonne, its lowest since April 15. Despite the steep fall, tin is still up 27 percent on the year so far.
Lead and zinc also took heavy knocks, closing down $76 at $1,952 and $140 at $1,980 respectively. "Rising stocks are just a symptom of weaker demand and improving supply," analyst David Thurtell at BNP Paribas said.
Selling was widespread, with copper for delivery in three months, often seen as a benchmark of the metals market, breaking below key support at $8,000 a tonne to close at $7,890, down $205 and its lowest since March 20, after losing 1.2 percent in the previous session. Stocks rose by 600 tonnes to 126,400 tonnes, and are up around 15 percent in a month on sluggish demand for copper, mainly used in the construction and power sectors.
The rise in copper stocks kept prices down. "The buying that everyone has been looking for, in the form of Chinese imports, is just not there at these levels. The price must probably come down towards $7,800-$7,900 to trigger some decent commercial interest," J.P. Morgan's analyst Michael Jansen said.
Lead and zinc suffered from rising LME stock levels, which are up by over 40 percent since the start of the year. "The correction is accompanied by a steady rise in inventories. LME stocks of zinc and lead are now at their highest for a year and a half, and those of aluminium at their highest for the past four years," analysts at Commerzbank said in a report.
Before the close, lead hit its lowest level since last March at $1,912 per tonne, down 5.7 percent from Wednesday, with stocks up another 1,550 tonnes to 65,125. Three-months zinc fell 6.7 percent to $1,977, its lowest since February 2006.
"We expect it (zinc) to continue to come under pressure ... as stocks continue to rise as the market moves further into surplus," a Barclays Capital report said.
Nickel lost momentum after trading in positive terrain earlier in the session, with prices down over 20 percent in the past month on sluggish demand from stainless steel producers. Nickel closed at a quote of $22,200/22,250 a tonne, down $300, after shedding 3.4 percent in the previous session.
The metal has fallen by over 15 percent so far this year as stainless steel producer demand, accounting for some 70 percent of the global nickel offtake, has disappointed. Aluminium fell $80 to close at $2,880 a tonne.
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