Nickel dropped for a third day in London, leading declines by industrial metals, on speculation demand from stainless-steel makers will continue to slide. Stainless output will probably fall about 19 percent in Europe in 2009 and global demand may sink as much as 40 percent, Michael Wright, president of the Bureau of International Recycling’s Stainless and Alloy Board, said on May 25. Stainless accounts for about two-thirds of world nickel demand. “The non-China world of stainless steel is still fairly weak,” David Wilson, an analyst at Societe Generale in London, said today by phone. States’ efforts to revive the construction industry will be of less help to stainless producers than to makers of the regular steel used in infrastructure and buildings, he said. Nickel for three-month delivery fell $155, or 1.1 percent, to $14,050 a metric ton by 1:37 p.m. on the London Metal Exchange, paring this year’s gain to 20 percent. The contract has dropped 4.1 percent in the past three days. The Reuters/Jefferies CRB Index of commodities fell as much as 0.3 percent after dropping the most in six weeks yesterday. Industrial metals’ declines are likely to be short-lived, particularly for copper, because decreased stockpiles indicate improved demand, said Neil Buxton, managing director of researcher GFMS Metals Consulting Ltd. in London. ‘Buying Opportunity’ “Metals have performed very well this year, and investors are likely to see these declines as a buying opportunity,” Buxton said today by phone. The LME Index of nickel and five other industrial metals has added 33 percent in 2009. U.S. initial jobless claims fell by 4,000 to 621,000 in the week ended May 30, in line with forecasts, from a revised 625,000 the prior week, the Labor Department said today. The number of people collecting unemployment insurance fell for the first time in almost five months, breaking a string of 17 consecutive records. Copper for three-month delivery was unchanged at $4,920 a ton, erasing a drop of as much as 1.5 percent. The metal reached a seven-month high of $5,145 on June 2. Copper for July delivery gained 1.2 percent to $2.2375 a pound on the New York Mercantile Exchange’s Comex division. Stockpiles of copper in LME-monitored warehouses fell 1.1 percent, trimming the metal’s inventory to 303,200 tons, the lowest since Dec. 11. Chinese Demand Copper demand in China, the world’s largest consumer, may rise between 7 percent and 8 percent this year, partly on investment in power infrastructure, according to Michael Jansen, a London-based analyst at JPMorgan Securities. “Inventories sitting here will get processed in a big way” in the fourth quarter, Jansen said yesterday in an interview in Shanghai. Tin dropped $92, or 0.6 percent, to $14,408 a ton. Stockpiles of the metal tracked by the LME jumped 4.9 percent to 15,490 tons, the highest since Aug. 28, 2007. The lending fee for next-day delivery of tin jumped to as much as $20 a ton per day, the highest since April 28, from yesterday’s $1.25 discount. That signals low availability. Between 50 percent and 79 percent of deliverable tin in LME- monitored warehouses was held by one unnamed firm as of June 1, the exchange’s data show. Among other LME metals, aluminum lost 0.1 percent to $1,482 a ton, lead dropped 0.8 percent, to $1,597 a ton, and zinc slipped 0.1 percent to $1,534 a ton.

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