Nickel sheds recent gains on profit taking

LONDON — Nickel came off twoyear highs on Tuesday as investors booked profits from a rally that was supported by a low dollar and an improving demand and supply outlook.

Benchmark London Metal Exchange ( LME) nickel ended 3.30% lower at $13,350 ounces. The metal, which is also used in electric vehicle batteries, touched $14,040 per ton on Monday, its highest since May 2015.

“Base metals are down across the board and there has not been much reason for nickel to have been up in the first place,” said Societe Generale metals specialist Robin Bhar.

He said the move lower was likely an unwinding of speculative buying that pushed nickel higher last week. But he added that rising demand and falling stocks meant fundamentals for the metal were gradually improving.

Nickel jumped 7.30% last week, making it the best performing base metal.

On-warrant LME inventories of nickel, those not earmarked for delivery, fell to their lowest level in 2018 at 250,920 tons.

Funds have raised their bets on prices rising, with LME net long nickel positions rising to 47,708 lots on Jan. 26, the highest since Jan. 2017.

The dollar gave back earlier gains on Tuesday after US yields pulled back from recent highs. A weaker greenback makes dollardenominated assets cheaper for holders of other currencies.

Nickel output by First Quantum Minerals fell 24% to 17,837 tons last year from 23,624 tons in 2016, the company said in a preliminary production and sales report on Friday.

Investors were keeping an eye out for positive signals about infrastructure building in the State of the Union address by US President Donald Trump later in the day.

Norwegian aluminum maker Norsk Hydro plans to transfer energy- saving technology from a pilot project to primary smelters in the next five to six years, boosting output and cutting costs, the company’s head of technology told Reuters.

Aluminum ended 0.80% lower at $2,207 after touching its lowest in nearly two weeks, while tin shed 1.40% to $21,625 and lead slipped 0.40% to $2,592.

Zinc was down 1.50% to $ 3,496 a ton, having touched $ 3,584, its highest since July 2007, on Monday.

Copper edged down 0.50% at $7,050 a ton after slipping to its lowest in a week. —