UPDATE 7-Aluminium matches 3-yr low after U.S. data

Wed Nov 19, 2008 12:29pm EST
 
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* Aluminium revisits 3-year low on auto industry concerns

* Rising stock weigh on copper, aluminium and tin

* Analysts expect to see higher aluminium stocks

(Recasts, adds closing prices)

By Anna Stablum

LONDON, Nov 19 (Reuters) - Aluminium matched a three-year low on Wednesday after a hefty rise in stocks reinforced the weak demand outlook, particularly from the auto industry.

Higher inventories also helped push copper down more than 4 percent and tin by nearly 8 percent. [ID:nLME191108]

Three-month aluminium MAL3 on the London Metal Exchange fell to $1,870 a tonne, matching Tuesday's lowest level since October 2005. The energy-intensive metal ended at $1,878 a tonne from $1,918 at the close on Tuesday.

"Aluminium is an energy play and energy is coming down and there is a massive oversupply looming," analyst Marc Elliott at investment bank Fairfax in London said.

LME stocks of aluminium, widely used in transport and packaging, rose 81,975 tonnes to more than 1.7 million -- the highest since January 1995. Detroit saw the largest inflow of stocks -- up 55,550 tonnes.

"With the market moving further into surplus, demand weak ... we believe that there will be more large deliveries onto exchange," said Barcalys Capital in a note.

Aluminium prices have been further undermined by the bleak outlook for car makers, which has threatened the survival of Detroit's Big Three -- General Motors Corp (GM.N), Ford Motor Co (F.N) and Chrysler LLC [CBS.UL] .[ID:nT338414]

CRITICAL LEVELS

Copper prices sagged on news that construction starts on new U.S. homes fell to a record low in October, as did new applications for building permits, signalling that the housing downturn may extend well into the future. [ID:nN19323456]

Also weighing on copper was news that LME stocks rose above 280,000 tonnes, the highest since March 2004.  Continued...

 
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