Nickel breaks through technical levels to reach two-and-a-half year high

LONDON — Nickel broke through key technical levels to reach its highest since 2015 on Wednesday as a weaker dollar helped push dollar-denominated industrial metals higher by making them cheaper for users of other currencies.

“The whole industrial metals complex is being supported by a weaker dollar,” said ING analyst Warren Patterson.

Benchmark nickel on the London Metal Exchange (LME) closed up 1.90% at $12,935 a ton after touching $13,200, the highest since June 2015.

Nickel, used to make stainless steel, burst above a long- term downtrend line from 2011 at around $ 12,800 and resistance at $ 13,000, triggering technical buying, traders said. Traders said reports of production outages at nickel mines in Zambales, Philippines, a major exporter, could be helping drive prices higher.

Metal Bulletin reported that reduced availability pushed nickel uncut cathodes premiums in Rotterdam to an 11-year high, but this was unlikely to have caused significant change to the LME price, said Societe Generale analyst Robin Bhar.

Funds have ramped up bets on higher prices, doubling their net long position in LME nickel from a low in December to 29,746 contracts by Jan. 9.

Metals were boosted by a fall in the dollar against a basket of currencies after a report that China was ready to slow or halt its US treasury purchases.

Expectations of healthy metal demand were bolstered after the World Bank forecast global economic growth of 3.10% in 2018, up from three percent last year.

Two large warrant holdings fueled concern over the immediate availability of lead on the LME. Exchange data showed one entity held between 30% and 39% of warrants and another between 40% and 49% of warrants.

The shortest time spread on lead, tom/next, which represents the premium to roll over a position for a day, soared to a high of $ 10 a ton from $ 1.50 a day earlier. LME Lead ended up 0.20% at $2,550 a ton.

On-warrant zinc stocks available to the market at LME-registered warehouses fell to 129,300 tons after 9,950 tons of cancellations, supporting prices.

On-warrant inventories have fallen by around 35,000 tons this month, helping zinc rise to its highest in more than a decade on Tuesday. LME zinc finished flat at $3,336.

Copper closed 0.70% higher at $7,153, aluminum ended up 1.40% at $2,182 and tin finished 0.60% higher at $20,065. —