Metals: China power crunch undermines industrial metals

Nyrstar NV

27/09/2021 10:54

(Recasts, adds comment and London dateline)
    By Pratima Desai
    LONDON, Sept 27 (Reuters) - Prices of industrial metals came
under pressure on Monday as worries about demand in top consumer
China, where a power crunch and rationing is shutting factories,
triggered selling.
    The biggest loser was tin, which last week  CMSN3  hit a
record high at $36,830 a tonne on the London Metal Exchange, a
gain of 75% since January. Prices of the soldering metal were
down 4.2% at $35,000 a tonne at 0945 GMT.
    "The power issue acts as a double-edged sword, hitting
smelter production and leading to reduced supply," said ING
analyst Wenyu Yao. "This is positive for metals prices. However,
it is also affecting semi-fabricating and downstream consumers,
which is negative for prices."
    
    CHINA: Widening power shortages in China have halted
production at numerous factories including many supplying Apple
and Tesla. Tight coal supplies and toughening emission standards
have driven the power shortages across China.  urn:newsml:reuters.com:*:nL1N2QT09W
    NICKEL: Expectations of output curbs on stainless steel
mills in China because of power shortages have undermined
sentiment in the nickel market.
    Two-thirds of nickel consumption is accounted for by the
stainless steel industry, mostly located in China.
    Nickel prices  CMNI3  fell 2.4% to $18,920 a tonne.
    INVENTORIES: Historically low stocks in China are helping to
support copper prices. 
    Stocks in warehouses monitored by the Shanghai Futures
Exchange  CU-STX-SGH  fell last week for the seventh straight
week to 44,629 tonnes, their lowest since June 2009.
    In LME registered warehouses, copper stocks  MCUSTX-TOTAL 
at 223,175 tonnes have fallen more than 10% since the start of
September, while cancelled warrants -- metal earmarked for
delivery -- stand at 44%.
    Copper was up 0.5% at $9,379 a tonne.
    ZINC: Prices of zinc  CMZN3  have soared due to looming
supply shortages, to their highest since June 2018. 
    "Prices are up on expectations of a tighter concentrate
market as Northern China-based mines will slow down operations
over the winter, while smelters start to build up feedstock
inventory," ING's Yao said.
    Zinc  CMZN3  was down 0.6% at $3,110 a tonne.
    OTHER METALS: Aluminium  CMAL3  was little changed at $2,917
and lead  CMPB3  added 0.2% to $2,158 a tonne.
    

 (Reporting by Pratima Desai; editing by Editing by Simon
Cameron-Moore)
 ((pratima.desai@thomsonreuters.com))
 
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