Nickel gains capped by caution over high inventories


Nickel gains capped by caution over high inventories: Nickel and copper led the base metals complex higher on Friday, supported by a softer dollar, though both metals remained on track for weekly declines.

Benchmark copper on the London Metal Exchange was bid up 0.4 percent to $6,765 a tonne after failing to trade in official rings. Nickel added 1.3 percent to $11,520.

Nickel, mainly used in stainless steel, rallied to a two-year high this month on its expected use in electric , but prices have since pulled back because of high inventories.

ING commodities strategist Warren Patterson said the base metals complex was undergoing a price correction, with help from Friday’s weaker dollar.

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“The nickel market got a bit ahead of itself, rallying as much as did, given that we still have a lot of inventory to draw down before becomes an overly bullish story,” he added.

INVENTORIES: On-warrant inventories of copper — those not earmarked for delivery — fell by 6,925 tonnes to 148,250 after fresh cancellations.

On-warrant nickel stocks fell by 7,302 tonnes to 246,504 tonnes. That helped prices on the day, but they are still flat on the year.

EV DEMAND: Wood Mackenzie analysts estimate nickel demand in electric vehicle (EV) batteries will rise to about 220,000 tonnes in 2025 from about 40,000 tonnes last year.

DOLLAR: The slipped to a four-week low after the Journal reported that investigators looking at possible Russian interference in the 2016 election had subpoenaed President Donald Trump’s election campaign for documents.

COPPER TECHNICALS: The next major support for copper is $6,675 a tonne with resistance into $6,850, Marex Spectron said in a note.

COPPER: A fire broke out at the main port used by copper miner Freeport-McMoRan Inc in Papua, , on Thursday night, the company said, adding that the incident would not affect shipments.

Villagers near the Freeport mine were evacuated after a string of shootings.

BHP BILLITON: The world’s biggest mining company BHP Billiton is seeking a buyer for its nickel business in , it said on Thursday.

ALUMINIUM: Aluminium eased by 0.3 percent to $2,095 a tonne in official trading and is on track for a second weekly decline, having shed almost 4 percent last week.

Expected capacity cuts in and falling inventories in -approved warehouses have helped push aluminium prices up 24 percent this year.

PRICES: Lead was bid 0.7 percent higher at $2,418 a tonne, tin rose 0.5 percent to $19,450 and zinc was bid up 0.4 percent to $3,157.50.

Copyright Reuters, 2017



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