Industrial metal prices slump as China cools

Prices for metals used in manufacturing have hit new lows as Chinese demand weakens.

The prices of economically sensitive industrial metals such as nickel, aluminium, iron ore and copper have dropped dramatically over the past year. Nickel is at a three-year low of $15,450 a tonne, says Jack Farchy in the Financial Times. Aluminium, used in the aircraft and car manufacturing industries, is down 20% since March to $1,899 a tonne nearing its 2009 lows.

"The recent weakness is much more pronounced than the previous corrections'," says Puru Saxena on Kitco.com. If producers' margins continue to be squeezed, miners may be forced to cut output to support prices. The share price of Anglo American, one of the world's top-ten nickel producers, fell by 5% after it reported lacklustre results last week, while Svein Richard Brandtzaeg, CEO of aluminium producer Norsk Hydro, told the FT that the current "extremely low" aluminium prices make it "impossible" for the sector to "deliver a decent return".

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