METALS-Aluminium sinks to 6-month low on growth, China COVID concerns
Adds comments, details, updates prices
By Brijesh Patel
June 13 (Reuters) - London aluminium prices dropped to a six-month low on Monday, as worries grew that rising COVID-19 cases in Beijing and prospects of elevated interest rates for a longer time would hammer global economic growth and dent demand for metals.
Three-month aluminium on the London Metal Exchange CMAL3 slipped 1.4% to $2,643.50 a tonne, as of 0421 GMT, its lowest since Dec. 16.
The most-traded July aluminium contract in Shanghai SAFcv1 fell 2.5% to 20,070 yuan ($2,978.54) a tonne by the midday break.
Copper CMCU3, often used as a gauge of global economic health, was down 0.7% at $9,383.50 a tonne, after hitting a more than two-week low earlier in the session.
"Metals outlook in the near term is likely to remain under pressure. The Chinese market is heading to a traditionally soft period in the coming weeks, on top of new threats of lockdowns and a sluggish economy," said Paul Adkins of AZ Global Consulting.
"Also, the recent scandal with warehouses in China has sent traders back into their tents. However, there are some upward price opportunities due to the warehouses being closed limiting some metal supplies."
An investigation into the fraudulent use of aluminium stocks to raise finance in China has expanded to three Shanghai-based companies suspected of having pledged aluminium stocks several times over, the state-backed Securities Times reported. nL4N2XX0S5
Risk sentiment in wider financial markets remained weak as worries about even more aggressive Federal Reserve policy tightening, and a COVID-19 warning from Beijing dented investors' appetite. MKTS/GLOB
Beijing's most populous district Chaoyang announced three rounds of mass testing to quell a "ferocious" COVID-19 outbreak that emerged at a bar in a nightlife and shopping area last week. nL1N2XZ00Y
U.S.: Data showed the U.S. consumer price index accelerated to 1% in May from 0.3% in April, suggesting that the Fed could continue with its 50 basis points interest rate hikes through September to combat inflation. nL1N2XW25Z
DOLLAR: The U.S. dollar =USD jumped to a near one-month high against its rivals, making greenback-denominated metals more expensive for buyers using other currencies. USD/
Inventories: Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 18.7% from last release on June 02. nAZN078FHI
OTHER METALS: LME zinc CMZN3 fell 0.3% to $3,680, lead CMPB3 dipped 0.9% to $2,129.50, and tin CMSN3 fell 0.8% to $35,000.
Shanghai copper SCFcv1 was down 0.9%, zinc SZNcv1 slipped 0.9%, nickel SNIcv1 fell 4.2%, lead SPBcv1 edged 0.3% lower, and tin SSNcv1 dropped 4.5%.
($1 = 6.7382 Chinese yuan)
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)
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