- China Hongqiao set to boost capacity by 16% this year
- Copper holds below four-month high as tin and zinc climb
Aluminum extended declines after the biggest drop in two months last week as the world’s largest maker of the metal said it will expand capacity.
China Hongqiao Group Ltd., which last year surpassed Russia’s United Co. Rusal as the biggest producer, will boost capacity by 16 percent this year to about 6 million metric tons, Chief Executive Officer Zhang Bo said at a press conference in Hong Kong Monday. JPMorgan Chase & Co. last week recommended selling aluminum on the threat that companies in the Asian nation would restart production.
“There’s certainly a lot of supply around,” Peter Thomas, a senior vice president at Zaner Group LLC, a metals broker in Chicago, said in a telephone interview. The China Hongqiao announcement “means prices are going down another 1 to 2 percent.”
Aluminum for delivery in three months fell 1.2 percent to settle at $1,542.50 a ton at 5:53 p.m. on the London Metal Exchange, extending last week’s 1.6 percent slump that was the worst such loss since Jan. 1. Prices retreated on Monday even after a report released at the weekend showed Chinese output in January and February dropped 7.7 percent from a year earlier.
"From a fundamental point of view, higher aluminum prices cannot be justified," Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail.
- Zinc, copper, lead and nickel declined in London, while tin advanced.
- Data over the weekend showed the China’s industrial production and retail sales both grew less than economists forecast in the first two months of 2016.
- The Bloomberg Intelligence index of 18 large global base metal producers rose 1.1 percent, with Anglo American Plc and Freeport-McMoRan Inc. leading gains.