BLBG:Nickel Declines Most in Eight Weeks on Signs of China Slowdown
Nickel fell the most in eight weeks in London on concern supply is ample amid signs of weaker economic growth in China, the world’s biggest consumer of the metal. Copper and aluminum slid.
Retail sales gained at the slowest pace since 2009 during last week’s Lunar New Year festival in China, a Ministry of Commerce statement showed Feb. 15. Nickel, used mostly to make stainless steel, is in “acute oversupply,” Morgan Stanley said today. Inventories of nickel tracked by the London Metal Exchange reached the highest level since 2010 last week.
“The market is down due to retail sales of the holiday week,” Pengjiang “Richard” Fu, director for Asian commodities trading at Newedge Group SA in London, said by e-mail. The Chinese holiday is comparable to the peak Christmas shopping rush in the U.S.
Nickel for delivery in three months slid 1.6 percent to $18,090 a metric ton by 11:16 a.m. on the LME. Prices lost as much as 2.3 percent, the most since Dec. 20. Copper fell 0.9 percent to $8,136 a ton and the contract for delivery in May dropped 1.2 percent to $3.709 a pound on the Comex in New York, where floor trading is closed today for Presidents’ Day.
New projects are adding nickel production into a market that’s already getting more supplies of Chinese nickel pig iron, a lower-priced substitute for refined metal, Morgan Stanley said in a report. Stockpiles tracked by the LME, up 9.6 percent this year, slipped 0.1 percent to 153,270 tons today, according to exchange figures.
“An expected rebound in demand will not adequately absorb high global inventory,” said Morgan Stanley analysts including Melbourne-based Peter Richardson.
Markets closed for all of last week in China for the new- year holiday and were shut for portions of the period elsewhere in Asia. No Chinese business was seen at all today, David Wilson, an analyst at Citigroup Inc. in London, said by e-mail.
LME copper stockpiles climbed for a third day to 404,300 tons, the highest since Nov. 14, 2011, on deliveries in New Orleans and the Belgian city of Antwerp. Inventories in Antwerp more than doubled this year.
Lead, zinc, aluminum 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
