Traders said funds had been selling for some days now, initially to cut their long positions and recently taking bets on lower aluminum prices as data from China showed shrinking manufacturing activity.

Benchmark aluminum on the London Metal Exchange was down 1.5% at $2,715 a tonne Tuesday afternoon, from an earlier $2,697.5 a tonne, the lowest since December 21.

“The potential for Chinese and global demand to be as weak … points to the need for caution near term,” said Citi analyst Max Layton.

But aluminum supply risks remain elevated, with about 1.5-million to two million tonnes of output at risk of closure across Europe and Russia over the next three to 12 months, Layton said.

This is about 2% of global aluminum supplies estimated at about 70-million tonnes this year.

China’s economy has taken a hit as authorities race to stop the spread of record Covid-19 cases, which have led to a full or partial lockdown in dozens of cities.

The country is the world’s largest producer and consumer of aluminum.