Aluminum fell, approaching a six-year low, on concern that China’s yuan devaluation this week will make exports of the metal cheaper, adding to a global glut.
China’s shipments in 2015 through July surged 28 percent from last year, to a record. The average cost to produce primary aluminum in the country dropped by $12 a metric ton, to $1,728, after China devalued its currency’s fix against the dollar by 1.9 percent, according to Harbor Intelligence in Austin, Texas.
Prices fell to the lowest since 2009 on Wednesday on prospects for slowing demand and increased shipments abroad from China, the world’s largest producer of the metal. Earlier this week, Goldman Sachs Group Inc. reduced its aluminum price forecasts by at least 21 percent from 2016 through 2018 because of a global surplus.
“The devaluation is making matters worse for aluminum, and the fundamentals are very, very weak,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “Investor sentiment has been continuing to fade in industrial metals.”
Aluminum for delivery in three months slipped 0.9 percent to settle at $1,574 a ton at 5:50 p.m. on the London Metal Exchange. On Wednesday, the material used in beverage cans and airplanes retreated to $1,553.50, the lowest since July 9, 2009.
Copper, nickel and tin fell on the LME, while lead and zinc gained. In New York, copper futures for September delivery rose 0.1 percent to $2.353 a pound on the Comex.