Picture: REUTERS/OLIVIA HARRIS
Picture: REUTERS/OLIVIA HARRIS

Hanoi — Shanghai aluminium prices fell to a near six-week low on Tuesday, as traders took cues from a broader sell-off in Chinese markets ahead of the year-end.

The most-traded February aluminium contract on the Shanghai Futures Exchange dropped as much as 2.9% to 15,295 yuan ($2,341.01) a tonne, its lowest since November 18, before edging up to close at 15,365 yuan a tonne, still down 2.5%.

Three-month aluminium on the London Metal Exchange declined 2.1% to $1,987 a tonne by 7.42am GMT.

“Most Chinese markets are down. Aluminium is probably the worst (of base metals). It has been trading in the $2,000-$2,100 range but is finally giving away,” said a Singapore-based commodity banker.

The decline follows a broader sell-off in Chinese equities as investors booked profits before the year-end after a stellar economic recovery hopes-led rally.

Shanghai Futures Exchange aluminium has gained 22.5% so far this year, the best performer in the base metals complex on the exchange, followed by zinc at 21.3%.

Shanghai Futures Exchange zinc dropped to a three-week low of 20,940 yuan a tonne, down as much as 3.5%, while London Metal Exchange zinc declined 1.9% to $2,790 a tonne.

However, losses across the board were limited as the US House of Representatives approved a plan for $2,000 Covid-19 relief cheques, up from a previous $600.

London Metal Exchange copper rose 0.7% to $7,842 a tonne and nickel rose 0.9% to $17,150 a tonne. Shanghai Futures Exchange nickel fell 0.7% to 126,790 yuan a tonne and lead declined 0.9% to 14,715 yuan a tonne.

Copper should outperform other base metals next year because of its widespread applications, while aluminium prices should also gain.

Reuters

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