Aluminium headed for its worst losing streak since 1999 in London on speculation increased shipments from China, the world’s largest producer, will exacerbate a global oversupply of the metal.
“The immediate concern in the aluminium market is that you get some kind of production cuts and a change in export taxes would be counterproductive to that,” said Michael Widmer, a BNP Paribas analyst in London. “If more metal has found its way outside China, we would have an even bigger oversupply in the global aluminium market.”
Aluminium for delivery in three months declined $16, or 0.9 per cent, to $1,775 a metric tonne as of 9:24 a.m. on the London Metal Exchange, bringing the drop for November to 13 per cent. The metal has declined for five consecutive months, the longest run since the period ending February 1999.
The three-month contract for the metal used in beverage cans and cars will probably average $2,000 a tonne next year, down from $2,600 this year, BNP forecasts. Inventories of aluminium in warehouses monitored by the LME jumped 6,975 tonnes to 1.8 million tonnes, the most since December 6, 1994.
Copper dropped $51 to $3,645 a tonne after inventories gained 2,925 tonnes to 291,650 tonnes, the most since February 25, 2004.