Base metal prices drop, track equities rout on macro fears

04:51' PM - Thursday, 11/10/2018

Base metals prices fell sharply on Thursday, tracking a broad sell-off on equity markets as a gloomy macro-economic outlook raised concerns over demand-growth.

Shanghai shares slumped 5.2 percent to their lowest level since late 2014 after Wall Street suffered its worst drubbing in eight months on Wednesday.

"Base metals again fell victim to macro concerns amid a falling equity market. In the near-term, we think that this will remain the case," ANZ wrote in a note.

The price plunge comes even as inventories continue to drop, with London Metal Exchange copper stocks falling for 13 straight days to their lowest since June 2016 MCUSTX-TOTAL.

Malcolm Freeman, director of Kingdom Futures, said in a note that the sell-off in metals was driven by algorithmic trading and was "ignoring underlying fundamentals". "It may well be a case of stand aside until the storm dies down," he said.

FUNDAMENTALS

* LME COPPER: Three-month copper on the LME had fallen 1.1 percent to $6,173.50 a tonne by 0728 GMT, extending a 0.8 percent drop from the previous session.

* SHFE COPPER: The most-traded November copper contract on the Shanghai Futures Exchange closed 1.4 percent lower at 49,980 yuan ($7,217.33) a tonne.

* OTHER METALS: Shanghai aluminium finished down 2.1 percent, while nickel lost 2.6 percent and zinc , which hit its highest since June on Wednesday, slipped 1 percent. Shanghai lead and tin were the only gainers, nudging up 0.3 percent and 0.1 percent, respectively.

* ALUMINA: Norway's Norsk Hydro is focused on a return to full output at its Alunorte alumina refinery in Brazil and is not contemplating layoffs there, CEO Svein Richard Brandtzaeg told Reuters on Wednesday.

* ALUMINIUM: Rio Tinto is close to restarting a sale process for some of its aluminium assets, including a plant in Iceland, which have been valued at around $350 million, two sources familiar with the matter said.

* GANFENG: China's Ganfeng Lithium fell 20 percent on its first day of trade in Hong Kong, a grim debut that follows a disappointing share sale and an ill wind for a planned listing by rival Tianqi Lithium. - Reuters -

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