Aluminum prices fell to their lowest level in 17 months on Wednesday and most other base metals lost ground as faltering global economic growth weakened demand prospects and boosted the dollar.
* The dollar has strengthened more in 2022 than in any year since 1981 and hit a 20-year high on Wednesday, making metals priced on the greenback more expensive for buyers with other currencies.
* A further increase in interest rates in the United States should serve to maintain the strength of the dollar, according to analysts.
* Global stock markets fell as weaker-than-expected trade data from China, the world’s largest consumer of metals, worsened the outlook for the global economy.
Benchmark aluminum on the London Metal Exchange (LME) was down 1.1% at $2,236.50 a tonne by 1633 GMT, having hit its lowest since April 2021 at $2,233.
* The price of metal used in transportation, packaging and construction has lost 20% this year.
* Supply of aluminum and other metals is tight and inventories are low, but the market is more focused on weakening demand and a rising dollar, independent analyst Robin Bhar said.
* Germany’s Speira said on Wednesday it will cut aluminum output by 50% due to high energy costs, adding to around a million tonnes of production capacity shut down in Europe in the past two years.
* However, large inflows of aluminum into LME-listed warehouses have eased supply concerns, moving spot aluminum for immediate delivery from a premium to a discount to the three-month contract.
* LME inventories rose to 309,500 tonnes from 277,050 on Monday, but remain well below recent levels.
* Among other base metals, fell 1.2% to $7,591.50 a tonne, 1.6% to $3,115.50, fell 1.1% to $21,345, lead it rose 0.5% to $1,902.50 and tin lost 2.3% to $20,720.