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Shanghai aluminium hits near six-month low as stockpiles rise

Shanghai aluminium fell nearly 4% on Wednesday to its lowest in nearly six months as weak property data and rising warehouse inventories in China pressured prices.

The most-traded January aluminium contract on the Shanghai Futures Exchange SAFcv1 declined as much as 3.7% to 18,280 yuan ($2,862.60) a tonne, its lowest since May 26.

Stockpiles of the metal, which is used widely in construction, transportation and consumer goods, rose to the highest since June 4 at 307,779 tonnes AL-STX-SGH in ShFE warehouses. Trading inventories of the metal in China SMM-ALU-CON hit a six-month high of 1 million tonnes.

Meanwhile, data released earlier this week showed China’s property woes worsened on all fronts in October amid deeper contractions in construction starts and investment by developers.

Weighing on investor sentiment towards China’s vast real estate sector has been a liquidity crisis that was triggered by debt woes at property giant China Evergrande Group 3333.HK.

Three-month aluminium on the London Metal Exchange CMAL3, however, rose 0.5% to $2,588 a tonne by 0317 GMT, supported by a decline in LME warehouse inventories MALSTX-TOTAL to a two-year low of 959,975 tonnes.

LME cash aluminium flipped to a premium, of $5.90 a tonne, over the three-month contract MAL0-3 for the first time since Sept. 2, indicating tightening nearby supplies.

FUNDAMENTALS
* LME copper CMCU3 rose 0.3% to $9,598 a tonne, nickel CMNI3 advanced 0.4% to $19,480 a tonne and lead CMPB3 fell 0.6% to $2,294 a tonne.

* ShFE copper SCFcv1 declined 0.8% to 70,240 yuan a tonne, nickel SNIcv1 shed 1.2% to 142,560 yuan a tonne and lead SPBcv1 lost 1.3% to 15,060 yuan a tonne.

* The dollar reached a four-and-a-half-year high against the yen after better-than-expected U.S. retail data, which also boosted Wall Street equities, although Asian shares failed to follow suit.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu)

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