Nickel declined for a fourth day in London on speculation demand will deteriorate as stainless-steel makers run down inventories until economic growth revives. Copper and aluminum also retreated. Nickel has dropped 12 percent this year, more than any other metal except steel on the London Metal Exchange. Demand for nickel will fall 15 percent this quarter from a year earlier and 10 percent in the next quarter, Barclays Capital forecast. Posco, Asia’s biggest stainless-steel maker, cut prices last week for the first time since August in an effort to spur demand. “We are clearly anxious over the coming quarters, and the market is remaining quite weak,” said Philippe Smits, managing director of stainless-steel warehouse company Contisteel NV/SA in Belgium. “I’m not getting signs things are improving.” Nickel for three-month delivery fell $55, or 0.5 percent, to $10,350 a metric ton at 10:16 a.m. on the LME, erasing a gain of as much as 1.1 percent. Prices have slid 10 percent this week. Inventories in Belgian and Dutch Contisteel warehouses that hold stainless steel are down 50 percent since last year, Smits said. “Due to the present economic situation, we are not prepared to build up any,” he said. Nickel inventories in LME-monitored warehouses jumped 576 tons to 88,728 tons, the most since June 27, 1995, the exchange said today. Some 75 percent of the total is held in warehouses in Rotterdam. LME warehouses are buyers of last resort. Nickel Demand “Very difficult” demand conditions for commodities will continue into next year, Tom Albanese, chief executive officer of mining company Rio Tinto Group, said today. Nickel demand will fall 25,000 tons short of production this year, Barclays forecast last week. Stainless steel accounts for 64 percent of use, according to Citigroup Inc. Copper for three-month delivery fell $64, or 1.9 percent, to $3,395 a ton, the third straight decline. The metal “seems to have found a base at just over $3,000 a ton,” Norddeutsche Affinerie AG, Europe’s biggest copper refiner, said today. Economic growth in China, the world’s largest copper buyer, “will probably slow down in 2009 but be clearly positive,” Hamburg-based Norddeutsche said. “This also applies to Chinese copper demand, which could be strengthened further as a result of purchases for its strategic reserves.” Aluminum dropped $13, or 0.9 percent, to $1,388 a ton, erasing a gain of as much as $12. LME copper stockpiles jumped 225 tons to 516,675 tons, the most since Oct. 31, 2003, according to the exchange. They have climbed 52 percent this year. Aluminum inventories are at a record 2.9 million tons. Zinc dropped $17, or 1.5 percent, to $1,155 a ton. Lead fell $22, or 1.9 percent, to $1,148 a ton. Tin stockpiles fell 50 tons to 8,720 tons, the lowest since Jan. 22. The three-month contract increased $300, or 2.8 percent, to $11,200 a ton.

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