LONDON: Aluminium prices retreated on Wednesday as investors took profit from an eight-session rally to keep prices below key technical resistance levels.
The most traded three-month contract for aluminium on the London Metal Exchange was down 1% at $2,479 per metric ton as at 1034 GMT. It fell from a five-week high on Tuesday, when prices of raw material alumina in China soared to their highest in three months.
The pause in the aluminium rally is “more technical but not driven by changes in fundamentals”, Ole Hansen, head of commodity strategy at Saxo Bank said.
Funds are re-positioning as aluminium prices move a touch away from the major $2,500 technical barrier, he said.
Raw materials remained tight for aluminum, with bauxite shipments from top producer Guinea hit by the rainy season. Ex-China production cuts also lowered global supplies of alumina.
Aluminium hits 5-week high on fund buying, alumina shortage
Copper, meanwhile, rebounded slightly by 0.6% to $9,258 a ton with further gains capped by a five-year high stockpile in warehouses monitored by LME. Growth in metals inventory is typically seen as a sign of weak consumption.
Market participants are also looking ahead to U.S. Federal Reserve Chair Jerome Powell’s comments on Friday for clues about the speed of the U.S. monetary easing cycle.
FOr other metals, lead climbed 1.6% to a three-week high of $2,086 with a continued drop in LME inventory in Asia. Lead stocks had shrunk by 21% to 185,500 metric tons since the start of August.
Its sister metal zinc increased 1.3% to $2,842.
Tin gained 0.7% to $32,505 and nickel lost 0.4% to $16,960.
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