According to Mining News Pro - Chinese aluminium producers are set to cut at least another 800,000 tonnes per year of smelting capacity in the coming months, while Beijing plans to ratchet up support for the economy in 2019 by cutting taxes and keeping liquidity ample. Investors, however, are fretting the global economy is slowing just as monetary conditions are tightening, with political instability in the United States leaving open the possibility of a prolonged government shutdown. There are also signs the Sino-U.S. trade dispute is hurting growth in China, the world`s top metals consumer.
"At the moment there are too many headwinds on the demand side for people to be concerned about supply," said Colin Hamilton, head of commodities research at BMO Capital Markets.
But he added the global aluminium market had a reasonably substantial deficit, while Beijing has made it clear it wants to see more consolidation in China`s aluminium sector.
* ALUMINIUM: Aluminium ended down 0.8 percent at $1,893 a tonne in holiday thinned trade, having hit its lowest since mid-July at $1,890, extending last week`s 16-month lows after the U.S. lifted sanctions on Russia`s Rusal, the world`s second-largest aluminium producer.
The metal is heading for a 16 percent fall this year.
* CHINA CUTS: "Capacity reduction will help to support aluminium prices ... But the scale of price rebound will depend on the actual implementation of the cuts," said analysts from CITIC Futures in a note.
* COPPER STOCKS: Stocks in LME-registered warehouses are near 10-year lows, suggesting supplies are tight, but the proportion not yet earmarked for delivery has almost doubled since the end of October. Copper ended down 0.6 percent at $5,955.50, having hit its lowest since mid-September at $5,941.
* GLOBAL MARKETS: World stocks were set for their seventh straight session of losses, with the S&P 500 on track for its worst December since the Great Depression.
* LEAD TECHNICALS: Lead closed up 1 percent at $1,985 a tonne, with signs of nearby supply tightness emerging as cash lead traded at a discount of just $3.5 a tonne to the 3 month price, its narrowest since mid-October.
* OTHER METALS: Zinc closed down 1.2 percent at $2,474 a tonne, tin ended up 0.1 percent at $19,375, while nickel closed up 0.1 percent at $10,890.