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METALS-Aluminium hits 3-week trough, copper touches 2-1/2 week low
June 6, 2017 / 10:52 AM / 3 months ago

METALS-Aluminium hits 3-week trough, copper touches 2-1/2 week low

* LME/ShFE arb: tmsnrt.rs/2oQ5nm2 (Adds closing prices)

By Maytaal Angel

LONDON, June 6 (Reuters) - Aluminium prices hit a three-week trough on Tuesday as traders brushed aside news that Qatar's exports of the metal had been blocked and focused instead on weak Chinese demand and rising geopolitical tensions.

Norway's Norsk Hydro said it was seeking other routes for its aluminium exports from Qatar, which have been blocked as a result of a diplomatic rift between the Gulf country and several Arab states.

Norsk Hydro and state-owned Qatar Petroleum each own 50 percent of the Qatalum joint venture, which produces more than 600,000 tonnes of primary aluminium per year.

"On a global scale Qatar plays a minor role in the aluminium market, direction is more dictated by China. There are sufficient (aluminium) supplies in China, inflows into Shanghai (warehouses) have increased and demand is relatively weak in summer," said Casper Burgering, analyst at ABN Amro.

* ALUMINIUM: London Metal Exchange aluminium ended flat at $1,903 a tonne, having earlier hit its lowest in three weeks at $1,887.

"Physical (aluminium) premiums have already been falling for weeks in most regions. Given that the availability of aluminium is not likely to have increased substantially of late ... the fall in premiums can presumably be attributed to a somewhat weaker demand dynamism," Commerzbank said in a note.

* GLOBAL MARKETS: World stocks fell as tensions in the Middle East, an election in Britain and upcoming testimony from the former head of the FBI pushed investors away from risky assets.

* COPPER: Copper ended down 0.2 percent at $5,616 a tonne, having hit a 2-1/2 week low of $5,553 on worries over Chinese and U.S. growth, and geopolitical risks.

* DOLLAR: The dollar sank to its lowest in more than six weeks against the yen, but the fall failed to lift metals. A weaker dollar makes dollar-priced metals cheaper for non-U.S. investors.

* OIL: Oil prices fell further below $50 a barrel on concerns that the Qatar diplomatic rift could undermine efforts by OPEC to tighten the market. Lower oil prices decrease mining costs and can deter investors from buying into commodity basket funds that include metals.

* ZINC: Zinc, used to galvanise steel, closed down 1 percent at $2,461 a tonne, having hit a 2-1/2 week low of $2,458 earlier due to weak Chinese steel markets.

* STEEL: Chinese steel futures fell for a ninth straight day, pressured by expectations of weak demand as a seasonal construction slowdown in the summer months looms.

* OTHER METALS: Lead ended down 1.3 percent at $2,074, tin closed down 2.3 percent at $19,675, having earlier hit its lowest since late April, while nickel ended down 0.6 percent at $8,860.

($1 = 6.7961 Chinese yuan renminbi)

Additional reporting by Melanie Burton, editing by David Evans and Susan Thomas

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