Aluminum prices dropped to the lowest this month in London and copper futures slid to a one-week low on Tuesday due to a stronger US dollar erodes commodity demand as an alternative investment. And speculation slower growth in China curb demand for heavy industrial metal.
The dollar traded close to the highest standard since 2009 versus a basket of 10 currencies and commodity price index to Bloomberg was nearing a minimum of five years. Retail sales increased for the eighth month on October 9, according to a Bloomberg survey of economists ahead of the data must Nov. 14, adding to signs of continuing economic recovery in US.
Aluminium futures delivery in three months decreased by 0.9 percent to $ 2,016 a ton at 12:31 pm on the London Metal Exchange, after earlier reaching $ 2.008, the lowest level since Oct. 30. Cash Copper trading at $ 60.75-a-prize-ton for three-month contract LME below $ 62 yesterday.
On the Comex division of the New York, copper futures contracts for December touched a 1 week low of $ 2.991 a pound, the lowest level since 5 Nov. On last session copper traded at $ 2.995 a pound in the morning Europe, down 2.5 cents, or 0.83%.
Copper also withdrew after data showed daily inventories of followed by the LME metal was expanded for a second session to 162.025 tons. Requests for withdraw copper warehouses fell during ninth session to 29,375 tons.
The greenback stayed that way bidding amid expectations the Federal Reserve will raise interest rates ahead of the other major peers.
The dollar index, which tracks the performance of the greenback versus a basket of six major currencies, picked up 0.18% to trade at 88.03, just below up to four years of 88.31 beaten last week.
A stronger US dollar generally weighs on copper as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
While, signs of a slowdown in Chinese economic growth and little hope for stimulation measures broad-based central bank weigh more.
China is the biggest consumer of world copper, representing nearly 40% of world consumption last year.
Offloading in MCX base metals has increased. Copper on the London Metal Exchange is the pressure, the effect is visible on domestic market. MCX Copper nearly 1 per cent decline to Rs 408.2. Aluminum also declined by 1.25 per cent.
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