• Aluminium only metal in positive territory

LONDON: Most industrial metals prices fell on Friday, weighed down by uncertainty over how much weak global economic growth is undermining demand, but aluminium rose on potential shortages.

“People are taking stock and trying assess what the next move is, not just for the economy and the trade war but for central banks around the world,” said Geordie Wilkes, head of research at broker Sucden Financial in London.

“With the macro(economic) and trade war uncertainty, as well as the situation in Hong Kong, from a demand perspective there’s downside, but support can come from supply-side shocks, like we’ve seen in nickel.”

Benchmark nickel on the London Metal Exchange hit a 16-month peak earlier this month on fears major producer Indonesia would bring forward an export ban of ore.

On Friday, LME nickel shed 0.3% to $16,200 a tonne in final open-outcry trading, as investors took profits on a rally that has sent prices up 35% since early July.

On the Shanghai Futures Exchange, however, the most active nickel contract climbed as much as 3.7% to 127,700 yuan ($18,132.51) a tonne.

The premium of LME cash nickel over the three-month contract jumped to $40 a tonne, a decade high, signalling tight nearby supplies in the LME system.

Traders said the tightness was probably largely due to a large position on the LME. Data showed that one party had control of 50%-80% of available inventories and short-term futures.

The Philippines’ top exporter of high-grade nickel ore is expected to shut its mining operations soon as ore deposits are nearly depleted, a ministry official told Reuters.

Over the past three days, copper inventories in LME-registered warehouses have jumped by 22% to 331,975 tonnes.

“While tight mine supply supports copper quotations at present and a short-covering rally may at some stage push prices higher, we ultimately see only limited upside to the red metal given the current macro backdrop,” metals strategist Michael Widmer at Bank of America Merrill Lynch said in a note.

LME copper finished down 0.1% at $5,745 a tonne.

China produced 801,000 tonnes of refined copper in July, up 4.8% year-on-year, while alumina output was up 2.9% in the same period to 6.22 million tonnes, official data showed.

LME aluminium was the only metal in positive territory, ending 0.6% higher at $1,792 a tonne amid ongoing concerns about disruptions after floods in the smelting heartland of China’s eastern province of Shandong.

“Aluminium has seen an onshore (Chinese) bid, apparently precipitated by flooding in Shandong, although low prices are also clearly applying cost pressure to producers worldwide,” Alastair Munro at broker Marex Spectron said in a note.

Zinc closed down 0.1% at $2,261, lead slipped 1.2% to $2,039 and tin tumbled 3.3% to $16,575, the lowest since June 2016.—Reuters