Nickel falls on abundant supply, fading mine fears

LONDON — Nickel prices fell on Tuesday on expectations of plentiful supply from Indonesia and the Philippines, while industrial metals were mostly lower as investors took profits following a recent rally.

Trade was thin as US markets were closed for the Independence Day holiday. “Volumes are very low so markets are easily moved,” a trader said.

Metals had been bolstered on Monday by strong manufacturing data in China, but Capital Economics analyst Caroline Bain said broader data pointed to a slowdown in Chinese growth.

“This optimism is going to fade.”

Benchmark nickel on the London Metal Exchange (LME) closed down 2.20% at $ 9,180 a ton. The stainless steel ingredient had gained nearly 9% since mid-June.

Nickel briefly fell below its 50day moving average. Support was at $9,100 and $9,005-$9,025, close to a recent low, brokers Marex Spectron said in a note.

Capital Economics’ Ms. Bain said supplies looked solid as Indonesia exported more ore and fears of mine closures in the Philippines faded. Chinese stainless steel production, the main source of nickel demand, had also fallen, she said.

Indonesia issued recommendations that will allow PT Ceria Nugraha Indotama to export 2.30 million tons of nickel ore through to July 2018.

Brazil’s Vale said it was reassessing its loss-making New Caledonian nickel operations.

LME copper ended down 0.60% at $5,892 a ton, eating into gains of more than 5% since mid-June.

Prices were supported by a fall in on-warrant stockpiles available to the market at LME warehouses to 176,125 tons, ending two days of large stock increases.

Chile’s Antofagasta was facing potential strikes at two mines with combined annual production of 160,000 tons.

At 1,690 tons, stocks of tin in LME warehouses are at their lowest since the 1980s. Benchmark tin finished 1% lower at $19,950 a ton. Falling stocks helped push the premium of cash tin over the three- month price to a high of $315 a ton, the largest since September 2015 and indicating tight nearby supply.

Global equities fell but the dollar held on to Monday’s strong gains and oil prices rose for a ninth day.

Three-month aluminum ended up $1 at $1,928 a ton and zinc closed 0.40% lower at $2,793. Lead did not trade but was bid down 1.60% at $2,299 a ton. —