October 4, 2018 / 10:48 AM / 8 months ago

METALS-Aluminium ends weaker after touching 3-1/2 month peak

    * Speculators sell positions as U.S. stocks slide
    * Copper hits highest since July 10, retreats
    * GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

 (Recasts with closing prices)
    By Eric Onstad
    LONDON, Oct 4 (Reuters) - Aluminium retreated on Thursday
after touching its highest price in more than three months on
Thursday as speculators turned negative when U.S. inflation
concerns grew on the back of comments by central bank officials.
    U.S. stock markets fell broadly while bond yields surged to
multi-year highs following robust U.S. economic data and after
Federal Reserve Chairman Jerome Powell said the economy can
expand for "quite some time."             
    "After the gains in metals over the last couple of days,
specs probably thought this was a good time to cash out," a
trader said.
    Earlier, aluminium had been boosted by worries over
potential shortages after Norsk Hydro          announced the
temporary closure of the Alunorte alumina refinery in Brazil,
the world's biggest producer of the raw material to make
    But even before prices went into the red in the European
afternoon, Capital Economics analyst Ross Strachan was wary,
pointing out that the closure might not last long.
    Hydro said on Wednesday it would halt production
indefinitely and lay off 4,700 people at Alunorte, which has
been operating at half of its capacity since March because of an
environmental dispute.             
    "It almost makes you wonder if this is an attempt by the
company to alleviate the situation by putting pressure on the
government," Strachan said.
    "You would think that there will be a resolution to
facilitate at least a significant restart, even if it's not able
to go back to full capacity." 
    Three-month aluminium on the London Metal Exchange        
closed open outcry trading down 1.7 percent at $2,169.50 a
tonne, retreating from its highest since June 14 at $2,267.
    Prices jumped 4.2 percent on Wednesday in its largest
one-day gain since April.

    * ZINC: LME zinc         finished closing rings up 0.2
percent at $2,654 a tonne, but later slid in after-hours
electronic activity and was down 1.2 percent at 1617 GMT. 
    Daily LME data MZNSTX-TOTAL showed zinc inventories rose
5,100 tonnes to 203,675 tonnes. 
    * COPPER: LME copper         finished closing rings up 0.4
percent at $6,290 a tonne, but like zinc, it slipped into the
red during late electronic trading.
    Earlier it had hit a peak of $6,393.50, the highest since
July 10. 
    * COPPER TECHNICALS: Copper's spike higher was partly due to
it breaking through technical levels, traders said.
    "It has carved a base and is confirming a double bottom. It
has re-tested July peak of $6,378 and could head towards the
potential near $6,507/6,550," Stéphanie Aymes, head of technical
analysis at Societe Generale, said in a note. 
    * CHINESE MARKETS: China's markets remain shut for the
week-long National Day holiday.
    PRICES: Nickel         closed down 2.2 percent at $12,490,
lead         ended off 0.7 percent at $2,006 and tin        
edged down 0.1 percent to $18,975.

 (Additional reporting by Manolo Serapio Jr. in Manila
Editing by Alexandra Hudson and David Evans)
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