Nickel prices hit a two-month low on Tuesday on signs of rising supply, while the wider market was mixed on conflicting signals about China’s economy.
Data showed the deficit in the global nickel market for the first two months of the year narrowed sharply to 5,700 tonnes from 24,400 tonnes in the same period last year.
“I can see why nickel is under a bit of pressure. The data is still showing a deficit, but it’s well below what we’ve seen over the last couple of years. And nickel ore prices are down to the lowest levels in over a year,” said Colin Hamilton, director of commodities research at BMO Capital in London.
“The Chinese NPI (nickel pig iron) production is up this year so we are getting decent amounts of supply growth coming through.”
Benchmark nickel on the London Metal Exchange was down 0.4 percent at $12,610 a tonne by 1040 GMT, the lowest since Feb. 19.
Nickel has shed 8 percent since touching a six-month peak in early March but despite the losses is still the best performing LME metal so far this year with gains of 18 percent.
The LME reopened on Tuesday after the long Easter weekend.
* CHINESE STIMULUS: Metals markets felt the chill from Chinese shares, which on Monday extended sharp declines from the previous session, as investors worried Beijing could slow the pace of policy easing following a stronger-than-expected economic performance.
“People are worried that the accommodative policy may face an end,” said Shanghai-based copper analyst He Tianyu of metals consultants CRU.
* CHINA SCRAP: China’s scrap copper imports in March fell 54 percent from a year ago to 100,000 tonnes, the second-lowest monthly figure in records since June 2014.
“The copper scrap import numbers were very low, so that does point to a tightening copper market over the course of the year,” Hamilton said.
Three-month LME copper fell 0.5 percent to $6,443.50 a tonne
* ALUMINIUM: LME aluminium got support after China’s environment ministry reprimanded provincial officials in Shandong, the country’s biggest aluminium producing province, for failing to curb the growth of highly-polluting aluminium output. Aluminium added 0.5 percent to $1,877 a tonne.
* PRICES: LME zinc advanced 0.6 percent to $2,784 a tonne, lead rose 0.4 percent to $1,948.50 and tin dipped 0.1 percent to $20,230.