METALS-Aluminium hits near 6-month low on China lockdowns, growth fears
By Eric Onstad
LONDON, June 10 (Reuters) - Aluminium prices hit their lowest in nearly six months on Friday and copper also dropped as investors fretted over the prospect of weak economic growth hitting metals demand after renewed COVID-19 lockdowns in China and increases to interest rates.
Three-month aluminium CMAL3 on the London Metal Exchange (LME) slid 3% to $2,677 a tonne by 1600 GMT, the lowest since December last year.
"Price pressure is due to uncertainty on growth prospects, weaker demand from the auto sector as well as the ongoing recovery in China's domestic output," analyst Sudakshina Unnikrishnan at Standard Chartered Bank said in a note this week.
LME copper CMCU3 fell 1.8% to $9,447 a tonne after dropping 1.2% in the previous session, while Comex futures HGcv1 dropped 2.1% to $4.29 a lb.
"Copper is coming under several sorts of pressure. The lockdowns aren't ending as quickly as hoped and China's zero-COVID policy is very damaging for economic growth," said Nitesh Shah, commodity strategist at exchange-traded fund provider WisdomTree.
"You've also got central banks in other parts of the world maintaining a very hawkish tilt and that puts into question whether economic growth outside of China is going to decelerate faster."
China's Shanghai commercial hub will lock down millions of people for mass COVID-19 testing this weekend, only 10 days after lifting its gruelling two-month lockdown. nL1N2XX03P
Other risky assets also fell, with equities hitting a two-week low as the European Central Bank interest rate outlook and higher-than-expected U.S. consumer price data for May stoked concerns over global growth. MKTS/GLOB
* The dollar index =USD climbed to a three-week high, making greenback-denominated metals more expensive for buyers using other currencies. USD/
* China's factory-gate inflation cooled in May, official data showed, depressed by weak demand for steel, aluminium and other industrial commodities because of tight COVID-19 curbs. nAZN077VH5
* LME nickel CMNI3 lost 2.6% to $27,285, zinc CMZN3 eased 1.6% to $3,700, lead CMPB3 fell 2.1% to $2,150.50 and tin CMSN3 tumbled 5% to $34,915.
(Reporting by Eric Onstad
Editing by David Goodman, David Evans and Louise Heavens)
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