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METALS-Nickel records biggest monthly fall since 2011

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* GRAPHIC-2019 asset returns: (Adds closing prices, Codelco) By Zandi Shabalala LONDON, Nov 29 (Reuters) - Nickel hit its lowest in more than four months on Friday and posted its steepest monthly loss in eight years on faltering steel output from top producer China and waning impact from an Indonesian ore export ban. Benchmark nickel on the London Metal Exchange (LME) closed down 2.4% at $13,670 a tonne after touching its lowest since July 16. It has fallen nearly 18% in November, the biggest monthly retreat since September 2011. Prices for the metal used in stainless steel had climbed to their highest in five years in September after top nickel producer Indonesia brought forward a ban on ore exports.

"We were always of the view that the initial rally after the ban was announced was overdone and a lot of it reflected speculative activity rather than actual demand in the physical market," said Capital Economics analyst Keiran Clancy. "What has reversed that is a drop off in operating rates at stainless steel mills in China and other indicators flashing red that may have prompted investors to liquidate long positions."

INVENTORIES: On-warrant stocks of nickel in LME-registered warehouses are up about 54% at 44,772 tonnes since hitting a 2007 low in October but are still down nearly 70% this year. SPREADS: Cash LME nickel was trading at a discount of about $44 a tonne to the three-month contract, indicating supplies are plentiful. CONSUMPTION: Nickel has come under pressure from worries about demand from stainless steel mills, mostly located in China, which accounts for roughly two thirds of consumption estimated at about 2.4 million tonnes this year. JAPAN: A global aluminium producer has offered Japanese buyers a premium of $92 a tonne for January-March primary metal shipments, down 5.2% from the current quarter, four sources said. Japan is Asia's biggest importer of the metal used in packaging and aircraft. TIN BALANCE: The global tin market will narrow its deficit to 1,900 tonnes next year from a 20,000 tonne shortage in 2019, the International Tin Association said. TRADE WAR: Metals were dragged down by a new U.S. law backing Hong Kong protesters, which prompted market concern that the move could torpedo efforts to end the U.S.-China trade war. CHINA SHUTDOWNS: Major metals producer and consumer China has shut more than 1,300 heavy metal enterprises since 2016 as part of a long-term plan to curb widespread chronic soil pollution, an environment ministry official said. SUPPLY: Codelco, the world's largest copper producer, reported a fall of 57% in its pre-tax earnings to September due to climate factors, a strike at its Chuquicamata mine in Chile and lower metal prices. OTHER PRICES: LME copper fell 0.5% to $5,864 a tonne, aluminium gained 1% to $1,770, zinc ended 0.2% lower at $2,273.50, lead eased 0.3% to $1,936.50 and tin added 0.5% to $16,495. (Reporting by Zandi Shabalala Editing by Mark Potter and Kirsten Donovan)

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