London aluminum prices fell on Thursday, taking a hit due to concerns about the potential economic impact of the Omicron coronavirus variant, but low inventories eased the decline.
As of 0704 GMT, three-month aluminum on the London Metal Exchange (LME) fell 0.9% to US$2,640.50 per ton. The main January aluminum futures contract on the Shanghai Futures Exchange closed down 1.2% at RMB 18,765 (US$2,944.87) per ton.
The Omicron variant found in South Africa is rapidly becoming the dominant variant of the new coronavirus. The U.S. detected a case of Omicron in the country on Wednesday.
The virus strain has been found in more than 20 countries.
However, as the LME aluminum inventory MALSTX-TOTAL fell to 893,775 tons, the lowest level since September 2007, down 55% from March, aluminum prices were supported. Exchange data shows that most aluminum stocks have recently left warehouses in Malaysia.
"The decrease in LME inventory is driven by demand-some moved to China, some moved to the West. Demand in all sectors has improved, except perhaps only China's real estate construction," said an aluminum trader.
The premium of LME aluminum spot compared with three-month aluminum MAL0-3 rose to 16.30 US dollars per ton, indicating that the supply is tight in the near future.
The CEO of Chilean National Copper Corporation (Codelco), the world's largest copper producer, predicts that copper prices will fall by 12% within one year, because supply will exceed demand by 2024, and the consumption growth of electric vehicles will match output Echoes.
Huayou Cobalt, a Chinese manufacturer of lithium battery materials, rose 4.7% in early trading on Wednesday, but the rate of increase has declined. Previously, the company stated that it signed a cooperation agreement with Dangsheng Technology to supply 300,000 to 350,000 tons of ternary precursors in the next four years.
LME copper futures fell 0.6% to US$9,392 per ton, nickel futures fell 0.2% to US$19,905 per ton, and lead futures fell 0.8% to US$2,284 per ton.
Shanghai copper fell 1.2% to 68,650 yuan per ton, and Shanghai nickel fell 1.1% to 147,390 yuan per ton.