Aluminum reaches three-week low on prospects for larger surplus

Aluminum reached a three-week low in London on prospects for a global surplus of the lightweight metal to expand. Copper slumped, narrowing the biggest monthly gain since September.

Supply of aluminum will outpace demand by 994,000 metric tons this year, above the prior 883,000-ton estimate, said Shingi Yamagiwa, manager of light-metals trading at Sumitomo Corp. (8053) Orders to withdraw aluminum from stockpiles tracked by the London Metal Exchange dropped for an eighth week in nine this week, according to daily bourse data.

“The fundamental outlook remains poor,” Stephen Briggs, an analyst at BNP Paribas SA in London, said in a report. “It is hard to see cutbacks being sufficient to significantly erode excess stocks.”

Aluminum for delivery in three months dropped 1 percent to $1,816 a ton by 10:26 a.m. on the LME and reached $1,815, the lowest since Aug. 8. Copper declined 0.2 percent to $7,138 a ton, trimming August’s gain to 3.8 percent, and the metal for delivery in December fell 0.3 percent to $3.2495 a pound on the Comex in New York.

The Bloomberg Dollar Index, a gauge against 10 currencies, touched a four-week high. A stronger dollar makes commodities priced in the currency more expensive in terms of other monies.

Aluminum may be poised to decline about 13 percent after prices failed to rise above a 200-day moving average, according to technical analysis by Commerzbank AG.