By Laura Clarke LONDON--Nickel prices on the London Metal Exchange underperformed other base metals Monday as market watchers continued to speculate over the future of an ore export ban in Indonesia, and the actual impact the regulation may have on the market. Other base metals were mixed in choppy trading, with prices under pressure as globally assets that suffer from heightened risk-aversion in markets fell. Investors were also anticipating the Federal Reserve's next policy statement and a calming of market activity as New Year celebrations in major market China get underway at the end of the week. "Risk aversion has returned to the markets, with equity markets and the currencies of emerging economies in particular experiencing strong selling pressure," noted base metal analysts at Commerzbank. LME 3-month nickel traded 1.1% down from Friday's closing price, at 14,331 a metric tonne. Copper rose 0.2% to $7,194.25 a tonne, while aluminum fell 0.3% to $1,756 a tonne. "Nickel is underperfoming the base complex, with news reports suggesting that Indonesia may not impose a full ban on ore exports," noted Vicky Sanders, head of analytics sales at Marex Spectron. The ban, which came into force Jan. 12, has supported nickel prices in recent weeks as investors expected it would affect the global nickel supply chain. "Speculative profit taking supported the initial rally in copper this morning, however, fresh selling interest entered the market around the $7,200 level," said Ms. Sanders. Base metals market participants were cautious ahead of the Federal Reserve's next statement on monetary policy, slated for Wednesday. The Wall Street Journal reported last week that the Federal Reserve is poised to scale back its bond-buying program for the second time in two months after the end of the two-day Federal Open Market Committee, curtailing the program intended to help boost U.S. economic growth. Such a move, although highlighting the Fed's confidence in the U.S. recovery, could be negative for base metals prices, as the program as kept demand for industrial commodities elevated as a for of economic stimulus and as a source of liquidity in financial markets. LME 3-month zinc was up 0.1% at $2,021.25 a metric tonne, while lead fell 0.5% on Friday's close to trade at $2,156 a tonne, and tin gave up 0.3% to trade at $21,950 a tonne.

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