15 MARCH 2016AlCircle.com
Aluminium hits 3-week low over mixed China data and stronger dollar
Edited by : AL CIRCLE
1 min read
A firm dollar and weak Chinese industrial output weighed heavily upon aluminium causing it to hit a three-week low on Monday. Chinese factory output growth during the first two months of the year was the weakest since the global financial crisis, while retail sales rose by the least since May 2015.
Fixed asset investment (FAI), however, was higher than expected and there were signs of recovery in the country's property sector.
"The China data is a bit confusing because industrial production was a very weak number, but FAI was up," said Wiktor Bielski, head of commodities research at VTB Capital in London.
Three-month aluminium on the London Metal Exchange closed 1.2 per cent lower at $1,542.50 a tonne after touching $1,536, the weakest since Febuary 19.
China Hongqiao Group Limited, the top primary aluminium producer in the country, posted a 36.8 per cent jump in production last year, evidence of oversupply hitting prices. Also weighing on the metal market was a firmer dollar index as investors geared up for Japanese and U.S. central bank policy meetings.
A stronger dollar pressures commodities priced in the U.S. currency, making them more expensive for buyers using other currencies.
Fixed asset investment (FAI), however, was higher than expected and there were signs of recovery in the country's property sector.
"The China data is a bit confusing because industrial production was a very weak number, but FAI was up," said Wiktor Bielski, head of commodities research at VTB Capital in London.
Three-month aluminium on the London Metal Exchange closed 1.2 per cent lower at $1,542.50 a tonne after touching $1,536, the weakest since Febuary 19.
China Hongqiao Group Limited, the top primary aluminium producer in the country, posted a 36.8 per cent jump in production last year, evidence of oversupply hitting prices. Also weighing on the metal market was a firmer dollar index as investors geared up for Japanese and U.S. central bank policy meetings.
A stronger dollar pressures commodities priced in the U.S. currency, making them more expensive for buyers using other currencies.
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