LONDON: Aluminium prices rose on Thursday as hopes of economic stimulus in China, the biggest consumer, lifted global stock markets while the London Metal Exchange’s efforts to restart nickel trading remained chaotic.
Benchmark aluminium on the LME was up 2.2% at $3,328.50 a tonne by 1217 GMT. Prices have see-sawed since Ukraine was invaded by Russia, which produces 6% of global supply, hitting $4,073.50 on March 7 and $3,219.50 on March 15.
“There are visible signs of China decelerating and that is likely to hit overall demand,” said WisdomTree analyst Nitesh Shah.
Against that, demand for both aluminium and copper is likely to be boosted as energy transition comes into sharper focus, especially in Europe, Shah said.
He added that industrial metals are expected to be undersupplied “pretty much across the board” this year and predicted higher prices.
LME nickel slides limit down, aluminium rebounds on China hopes
Markets: Europe’s stock markets consolidated strong gains made in Asia after China signalled more support for its spluttering economy.
Coronavirus: Adding to positive sentiment, new cases of people with COVID-19 and showing symptoms of the disease in mainland China declined for a second day.
Nickel: LME nickel fell 8% to $41,945 a tonne - the maximum allowed under new LME rules - as soon as the market opened, with only eight contracts traded.
Trading had made a chaotic resumption after being suspended last week when a short squeeze sent prices soaring above $100,000. Nickel currently costs around $35,000 on the Shanghai Futures Exchange.
Russia: The invasion of Ukraine entered its fourth week, with limited progress in peace talks.
The conflict has disrupted Russian and Ukrainian commodity exports and raised the cost of energy used by metals smelters.
Global Economy: The Ukraine crisis could knock more than 1% off global economic growth this year and add 2.5% to inflation, the OECD said.
Japan: Core machinery orders in Japan slipped in January for the first time in five months.
Federal Reserve: Investors are racing to work out how much monetary policy tightening the economy can handle as the US Federal Reserve embarks on its rate-hike cycle.
Metals Prices: Benchmark copper was up 1% at $10,155 a tonne, zinc fell 0.3% to $3,799, lead rose 0.5% to $2,262.50 and tin was down 1.5% at $41,650.
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