Nickel leads decline in base metals amid China credit concerns
BEIJING: Nickel in London dropped from its highest level in almost two weeks as base metals retreated amid concerns that excessive credit growth is increasing risks in China, the biggest consumer of raw materials. Miners' shares also fell. The expansion in China's debt relative to gross domestic product could pressure the country's credit rating, Standard & Poor's said on Tuesday, less than a week after the cost to insure Chinese bonds against default rose to a fouryear high. Investors also aren't convinced that producers have done enough to cut output. Open interest in nickel expanded to a record on the London Metal Exchange last week as traders boosted bearish wagers. "Market sentiment changed as investors returned their focus to the fundamentals -demand in China hasn't recovered from the Lunar New Year break, while production is climbing after the holidays," said Xu Maili, an analyst at Everbright Futures Co. in Shanghai. Nickel, used in stainless steel, lost as much as 1.3 percent to $8,230 a metric ton and traded at $8,255 a ton by 3:30 p.m. in Singapore following its highest close since Feb. 4. All other metals in London fell. Aluminum futures in China advanced to the highest level in almost four months before sliding as much as 1 percent.