METALS-Aluminium nears two-week low as energy prices drop

(Recasts on aluminium and updates prices)

By Julian Luk

London Oct 8 (Reuters) - Aluminium prices fell close to two-week lows as energy prices fell on the back of plunging oil benchmarks while industrial metals overall came under pressure from worries about demand in top consumer China. Three-month aluminium on the London Metal Exchange (LME) touched $2,564.50 a metric ton for its lowest since Sept. 26 and was last down 3.3% at $2,570.50 a ton.

Aluminium, production of which requires more power than other industrial metals, is under more pressure than the rest of the complex, one trader said.

Oil prices slid on Tuesday as fears of supply interruptions from Middle East conflict eased while power prices in Germany and France for Wednesday fell 11.5% and 26.1% respectively.

Zinc, which is also relatively energy intensive, lost 2.9% to $3,082 a ton, its steepest decline in more than three months.

Also weighing on metals was a Chinese briefing on its economic stimulas package that failed to convince investors of how it would drive the economy to the country's growth target.

Three-month copper dipped to $9,700 a ton for its lowest since Sept. 24. It was last down 1.6% at $9,769.

"There had been overshoot in copper prices as the market priced in China's stimulus package as a game changer, but it now looks hesitant," another trader said, adding that there was also an element of profit-taking after rallies last week.

Copper prices hit a four-month high last week after China announced its biggest stimulus package since the COVID-19 pandemic. But Tuesday's provided little detail on the stimulus other than a repeat of China's confidence in achieving its full-year growth target.

Industrial metals fell on worries that measures announced so far will only help to stabilise growth and may not be enough to support a rebound, said Ole Hansen, head of commodity strategy at Saxo Bank.

Shares in copper miners, which sell to China, also dropped.

In other metals, nickel fell 2.2% to $17,650 a ton despite production disruption at Vale's Onca Puma nickel plant and the operations of Madagascar miner Ambatovy.

Tin, meanwhile, lost 3% to $32,885 and lead was down 2.2% at $2,101.50.

(Julian Luk in London Editing by Varun H K and David Goodman )