London copper, aluminum prices slide to new lows on weak demand outlook

Sep. 26, 2022 8:19 AM ETAlcoa Corporation (AA), FCXCENX, JJCTF, COPX, CPER, JJU, JJC, LMAHDS03:COM, HG1:COMBy: Carl Surran, SA News Editor6 Comments

Pile of Scrap Copper Rod

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London copper prices fell to fresh two-month lows on Monday, weighed by ongoing fears of a global growth slowdown, weaker demand and a higher dollar.

Additionally, rising stockpiles in London Metal Exchange registered warehouses totaling 129K metric tons are up more than 25% since September 15, while cancelled warrants have dropped to 7% compared with 50% in late August.

According to Reuters, benchmark LME copper (HG1:COM) recently traded -0.8% at $7,375/metric ton after tumbling to as low as $7,292, the lowest since July 21.

Meanwhile, London aluminum prices (LMAHDS03:COM) continued to drop to new 18-month lows, -0.7% to $2,139/ton, down 50% since hitting a record high of $4,073 after Russia invaded Ukraine.

Aluminum consumption and prices are expected to remain under pressure due to slowing growth, and a production ramp-up in China also is weighing on prices.

ETFs: (CPER), (COPX), (JJC), (JJCTF), (JJU)

Among potentially relevant tickers, (NYSE:AA) -2% pre-market, (CENX) -2.7%, (NYSE:FCX) -1.5%.

Alcoa (AA) has entered a difficult phase of the economic cycle, but beyond the doom and gloom is a "huge bull case," Leo Nelissen writes in a bullish analysis recently posted on Seeking Alpha.

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