Nickel spiked to its highest level in over two weeks on Friday as bearish investors covered positions, while other industrial metals gained on a weaker dollar and hopes for a U.S.-China trade deal.
World stocks edged higher and oil prices also recovered from bruising falls this week after U.S. President Donald Trump nurtured hopes of progress in U.S.-China talks.
“With the stock markets popping up a tad this morning and also the dollar strength pausing, that’s giving the market an excuse to cover some shorts ahead of the weekend, which is a long weekend in the UK and US,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“But we are by no means out of the woods yet, if anything, it may just be the market pausing before we hit the next headline.”
Benchmark nickel on the London Metal Exchange surged nearly $500 in about 10 minutes in the morning, spurred by Chinese investors covering short positions, traders said, continuing the rally in the afternoon.
That sent nickel surging 5% to a peak of $12,495 a tonne, the highest since April 30, before paring gains in closing open outcry activity to a bid of $12,370, a rise of 4%.
The move higher in nickel gained steam as it broke through its 200-day moving average, a key technical level, traders said.
* COPPER: Three-month LME copper climbed 0.5% to finish at $5,955 a tonne in closing rings, but on a weekly basis it marked a sixth consecutive decline.
* DOLLAR: The dollar index edged away from two-year highs on Friday after weak U.S. manufacturing activity data. A weaker dollar makes dollar-denominated metals cheaper to importers using other currencies.
* NICKEL FORECAST: Fitch on Friday revised down its London three-month nickel average price forecast for 2019 to $13,250 a tonne, from $14,500 estimated earlier, on rising global economic risks, an escalating trade dispute and disappointing refined nickel demand from China so far this year.
* TIN SPREAD: The premium of cash LME tin over the three-month contract CMSN0-3 jumped to $320 a tonne, the highest since April last year, indicating tight availability of immediate supplies.
* ZINC: LME zinc climbed 1.6% to end at $2,560 a tonne. The net speculative short position on the LME had expanded to 7.2% of open interest by the close on Wednesday, back to levels not seen since October 2018, according to Alastair Munro at broker Marex Spectron.
* ALUMINIUM: Strong aluminium output is expected for the rest of the year due to falling costs, Commerzbank said in a note. “We believe that the continuing high supply, coupled with the decline in demand dynamism, argues against any sustained and significant recovery of the aluminium price.”
* PRICES: LME aluminium added 0.1% to close at $1,800 a tonne, lead gained 0.9% to $1,825 and tin , untraded in closing rings, was bid down 0.1 percent at $19,300 a tonne.