Commodity Market: Industrial metals slip as inventories scale new highs

Aluminium prices have slumped below $2,200 while Iron ore inventories slip for the 5th consecutive week at 105.2mn tonnes, which is the lowest since June 2020.

Industrial metal stocks were dented on October 17, a day before China's economic growth rate for the third quarter will be released and a day after the world's second largest economy ramped up liquidity to avoid a rate cut, amid a sustained downgrade in the yuan.

Copper prices neared a five-month low as inventories kept rising on the London Metal Exchange (LME) and Shanghai EIA. According to data from the International Copper Association, the supply is expected to surge 26 percent by 2035, while demand may spike 50 percent in the same span of time.

On the nickel counter, the prices zoomed at two-year lows on sluggish demand as EV battery prices went down 10 percent in August. Nickel inventories are at their highest surplus in a decade.

Aluminium prices have slumped below $2,200, while iron ore inventories slipped for the fifth straight week at 105.2 million tonnes, which is the lowest since June 2020.

The metals and mining sector is expected to record mixed earnings for the September quarter, with ferrous firms likely to show stable-to-higher margins despite lower steel prices, thanks to reduced coking coal costs. Non-ferrous producers, on the other hand, are likely to see margin dip due to lower metal prices and volumes.

Also Read: Metals and mining sector to record mixed earnings in Sept quarter