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Prices of industrial metals came under pressure on Monday as worries about demand in top consumer China, where a power crunch and rationing is shutting factories, triggered selling.
The biggest loser was tin, which last week CMSN3 hit a record high at $36,830 a tonne on the London Metal Exchange, a gain of 75% since January. Prices of the soldering metal were down 4.2% at $35,000 a tonne at 0945 GMT.
“The power issue acts as a double-edged sword, hitting smelter production and leading to reduced supply,” said ING analyst Wenyu Yao. “This is positive for metals prices. However, it is also affecting semi-fabricating and downstream consumers, which is negative for prices.”
CHINA: Widening power shortages in China have halted production at numerous factories including many supplying Apple and Tesla. Tight coal supplies and toughening emission standards have driven the power shortages across China.
NICKEL: Expectations of output curbs on stainless steel mills in China because of power shortages have undermined sentiment in the nickel market.
Two-thirds of nickel consumption is accounted for by the stainless steel industry, mostly located in China.
Nickel prices CMNI3 fell 2.4% to $18,920 a tonne.
INVENTORIES: Historically low stocks in China are helping to support copper prices.
Stocks in warehouses monitored by the Shanghai Futures Exchange CU-STX-SGH fell last week for the seventh straight week to 44,629 tonnes, their lowest since June 2009.
In LME registered warehouses, copper stocks MCUSTX-TOTAL at 223,175 tonnes have fallen more than 10% since the start of September, while cancelled warrants — metal earmarked for delivery — stand at 44%.
Copper was up 0.5% at $9,379 a tonne.
ZINC: Prices of zinc CMZN3 have soared due to looming supply shortages, to their highest since June 2018.
“Prices are up on expectations of a tighter concentrate market as Northern China-based mines will slow down operations over the winter, while smelters start to build up feedstock inventory,” ING’s Yao said.
Zinc CMZN3 was down 0.6% at $3,110 a tonne.
OTHER METALS: Aluminium CMAL3 was little changed at $2,917 and lead CMPB3 added 0.2% to $2,158 a tonne.