BLBG:Nickel Drops Most in Three Weeks as Investors Seek to Curb Risk
Nickel fell the most in three weeks in London after investors moved to avoid riskier assets, sending equities lower and lifting bonds.
The Standard & Poor’s 500 Index (SPX) of shares slid the most since November by the close yesterday, and a gauge of euro-area bank stocks dropped the most in four months. The dollar gained the most in a month against a basket of six currencies, making raw materials less appealing as an alternative investment, and Treasuries advanced.
“We notice a few warning signs on the charts this morning,” said Justin Froome, a broker at Marex Spectron Group in London, citing the dollar’s “strong move higher” and the “large move lower” by bank equities. “Base metals have traded in very low volumes overnight, but are all lower,” he said.
Nickel for delivery in three months declined 0.5 percent to $18,640 a metric ton by 9:43 a.m. on the London Metal Exchange. Prices dropped as much as 1.3 percent, the most since Jan. 14. Copper for three-month delivery fell 0.2 percent to $8,291 a ton and the metal for delivery in March rose 0.1 percent to $3.7725 a pound on the Comex in New York.
Prices also retreated amid concern political turmoil in Spain and Italy will hamper responses to the euro-area sovereign-debt crisis that threatens metals demand. Spanish Premier Mariano Rajoy faces opposition calls to resign amid contested reports about illegal payments, and former Italian Premier Silvio Berlusconi is seeking to return to office.
Europe accounted for 22 percent of last year’s demand for nickel, used mainly to make stainless steel, and 18 percent of copper usage, according to Barclays Plc.
Copper stockpiles monitored by the LME, up 20 percent this year, rose 2.9 percent to 385,050 tons on inflows in Malaysia’s Johor and New Orleans, daily exchange figures showed. Canceled warrants, or orders to withdraw the metal from warehouses, dropped 4.2 percent to 31,275 tons, extending this year’s slide to 39 percent.
Zinc, aluminum, lead and tin fell in London.
To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
