Aluminium prices at the London Metals Exchange rose Monday as it continued to digest news of China's increase in export taxes for aluminium products, while weakness spread to the rest of the base metals complex.
LME three-month aluminium rose to a high of $2,834 a metric ton but retreated to a low of $2,782.50/ton Monday.
"Aluminium is benefiting from the announcement of China's tax on exports," said Adam Rowley of Macquarie Bank in London.
China increased its export taxes on aluminium to 15% from 5% and reduced import taxes on alumina. China also imposed export duties of 15% for copper and nickel among other commodities in a bid to curb growth in energy-intensive industries.
However, according to Michael Widmer of Calyon, China's tax announcement shouldn't have a major impact on the refined the copper market because China isn't a major exporter of refined metal.
LME three-month copper fell to a three-week low of $7,260/ton but continued to trade in its recent price range of $7,000 to $8,200/ton.
"There's no real news Monday in the copper market," said Rowley, adding prices are in need of a catalyst to break it from its range-bound activity.
Following copper's decline, nickel fell to a low of $30,087.50/ton before recouping part of those losses to $30,650/ton.
Meanwhile, LME three-month zinc raced to a new all-time high of $4,200/ton before retreating into the red to $4,155/ton.
Despite posting losses, zinc prices still closed strong in a chronically tight market, said Rowley. LME zinc stocks have been steadily falling and were down Monday by 1,850 tons to 108,950 tons, worth roughly four days of global consumption.
LME three-month lead – the other metal that has been seeing strong gains recently – fell to a low of $1,585/ton.
3 months metal (prices in dollars a ton)
Bid – Ask, Change from Friday PM kerb
Copper 7365.00-7370.00 Dn 104.00
Lead 1592.00-1594.00 Dn 7.00
Zinc 4160.00-4170.00 Dn 5.00
Aluminium 2807.50-2808.00 Dn 0.50
Nickel 30600.00-30700.00 Dn 350.00
Tin 10050.00-10100.00 Dn 300.00
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