LONDON, Oct 4 (Reuters) – Uncertainty about how metals demand will be hit by trade wars, rising U.S. interest rates and a slowdown in China is weighing on industrial metals prices, submerging signals pointing to potential shortages.
The index of copper and five other top industrial metals traded on the London Metal Exchange has shed 11 percent this year while prices for the worst-performing metals, zinc and lead, have tumbled by about a fifth.
But as speculators pile on bearish positions and investors flee from the metals market during tit-for-tat trade volleys, signs of metals shortfalls are building.
Aluminium inventories are at their lowest in more than a decade and nickel’s have touched five-year lows while physical premiums for zinc have hit their highest level in six years.
The price of aluminium touched its highest in more than three months on Thursday, supported by worries over potential shortages after the world’s biggest producer of alumina announced a shutdown.