LONDON: Aluminium prices hit their lowest in about a month on Thursday on fears of weak consumption after the world's biggest steelmaker cut its global demand forecast and Chinese data showed shrinking factory activity.
Top steelmaker ArcelorMittal cut its estimate for global steel demand growth to between 0.5% and 1.5% in 2019 from a previous forecast of 1%-1.5%.
"It's a read-across from the steel side. People are getting a bit nervous about the demand side and seasonally this is also weak period for global industrial demand," said Colin Hamilton, director of commodities research at BMO Capital.
"On the whole, I still have most of these base metals markets in deficit this year, but deficits don't matter without better demand."
Benchmark aluminium on the London Metal Exchange dropped for a third session and slipped 0.9% to $1,784 a tonne in official open-outcry trading, its weakest since July 3.
Three-month LME copper touched its lowest since July 10 at $5,893.50 a tonne before paring losses to $5,905 in official rings, a decline of 0.4%.
* FED: Also weighing on markets were comments by the head of the US central bank that an interest rate cut might not be the start of a lengthy campaign to shore up the economy against risks.
"People are taking it as slightly disappointing because they didn't really signal that they're going to cut again," Hamilton said.
* DOLLAR: The Fed comments helped to propel the dollar index to a 26-month peak, making commodities priced in the US currency more expensive for buyers using other currencies.
* TRADE TALKS: US-Chinese trade talks in Shanghai ended without any meaningful progress, "highlighting the reality that a deal is far from being reached", ANZ said in a note.
* CHINA PMI: Pressure on factories in top metals consumer China eased a little in July thanks to growth-boosting steps from the government, but overall manufacturing activity remained in contraction as the trade war with the United States dented export orders, a private survey showed.
* COPPER TIME SPREADS: The discount of LME cash copper to the three-month contract rose to $24.75 a tonne by Wednesday's close, the deepest discount since June 17, indicating healthy near-term supply. The discount was $6.25 three weeks ago.
* PRICES: LME zinc slid 2% to trade at $2,396 a tonne in official activity after touching $2,386, its lowest since July 12.
Lead shed 1.2% to $1,985 after hitting a two-week low of $1,980 while Nickel, untraded in official rings, was bid down 1.2% to $14,310 and tin was bid down 0.1% to $17,290 after hitting a three-year low of $17,200.
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