Aluminum drops as LME stocks reach record high

Source: Dukascopy Bank SA
© Scanpix/AFP
Industrial metals tumbled in short Monday's session as market participants shunned riskier assets amid growing uncertainty over US fiscal agreement. Strong US Dollar as well as weak global equities also added pressure on the base metals pack. However, recent positive US data restricted the downswing.

Aluminum came under heavy pressure following elevated LME stockpiles. LME inventories surged to a record high of 5.24 tonnes on Monday. Rising global production also pushed the light metal lower. International Aluminium Institute reported that daily average aluminum output jumped 0.6% in October.

Copper was bearish as bloated LME and SHFE stocks weighted on the red metal. Copper inventories at SHFE hovered near a seven-month high last week while LME stocks rose to almost one-year high on Friday.

Nickel and Zinc slumped amid high LME inventories and persistent surplus on the physical markets. Solid greenback and global demand concerns continued to push the metals down.


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