Aluminum slumps amid annual index rebalancing

Note: This section contains information in English only.
Source: Dukascopy Bank SA
Industrial metals dropped on Monday amid weak data releases from the Eurozone. The Eurozone's industrial production slid 0.3% versus a forecast of a 0.2% increase in November. Adding to the negative mood of base metals complex, investors have become increasingly concerned about US debt ceiling dispute.

Aluminum tanked amid ongoing index funds rebalancing that are likely to cut weight of the light metal. Dow Jones-UBS aluminum weighting is likely to be cut to 4.9% from 5.9% due to weak fundamentals.

Copper extended losses on weak demand from China. China's cooper imports shed 6.6% on a monthly basis in December. Meanwhile, Chinese demand is expected to remain quiet during Lunar New Year holiday in mid-February.

Nickel ended the session in the red territory amid surplus on the physical markets and bloated LME stockpiles.

Zinc came under heavy pressure on speculation that commodity indices will reduce zinc's weighting. Dow Jones-UBS is expected to cut zinc weighting to 2.5% from 3.4% that would result in a sale of 14,144 lots, over 8% of the total open interest.


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