July 7, 2017 / 10:26 AM / 2 years ago

METALS-Aluminium retreats from 5-week high as supply still robust

* LME/ShFE arb: tmsnrt.rs/2oQ5nm2 (Adds closing prices)

By Maytaal Angel

LONDON, July 7 (Reuters) - Aluminium fell on Friday, hit by profit taking and signs that supply remains robust despite worries about reduced capacity in China.

Profit taking emerged after the metal hit a five-week high on Thursday, and analysts said there was ample global supply to offset concerns about China, which earlier this year ordered steel and aluminium producers in 28 cities to slash output during winter as Beijing intensifies its war on smog.

“We’ve always been biased towards the China capacity cuts story, but near term there’s loads of aluminium hanging around. There’s been a big rise in Chinese exports and premiums are beginning to be depressed around the world,” said Vivienne Lloyd, analyst at Macquarie.

* ALUMINIUM: Benchmark aluminium on the London Metal Exchange ended down 0.7 percent at $1,930 a tonne, having hit its highest since May 30 on Thursday at $1,948.

* SUPPLY: Aluminium inventories in warehouses monitored by the Shanghai Futures Exchange AL-STX-SGH rose 1,006 tonnes from last Friday to 433,548, their highest since May 2013, exchange data showed.

* TECHNICALS-LME aluminium may test resistance at $1,951, per tonne, a break above which could lead to a gain to the next resistance at $1,964.

* COPPER: Bellwether copper, usually the driving force in the base metals complex, ended down 0.4 percent at $5,828 a tonne.

* CHINA: The mood in Chinese markets has been cautious ahead of a raft of data expected to show steady growth, although government measures to rein in the housing market and debt risks are likely to drag on activity in the next few quarters. China accounts for about half of global base metals demand.

* DOLLAR: The dollar gained across the board after a report showed the U.S. economy created far more jobs than expected in June and the previous months, keeping the Federal Reserve on track to raise interest rates at least once this year.

A strong dollar makes dollar-priced metals costlier for non-U.S. investors.

* PHILIPPINES: Nickel came under pressure after the new environment minister lifted a restriction on issuing environmental permits to projects, including mine exploration and development, reversing a previous order by his controversial predecessor dismissed in May.

* NICKEL: The news from the Philippines has eased worries about shortages of the metal used to make stainless steel, where production is slowing. Three-month nickel closed down 1.7 percent at $8,920 a tonne, having hit a two-week low earlier at $8,910.

* OTHER METALS: Zinc closed up 0.3 percent at $2,793 a tonne, lead closed up 0.5 percent at $2,296 while tin closed down 1.7 percent at $19,565.

Additional reporting by James Regan; Editing by Edmund Blair and Susan Fenton

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