Nickel drops on inventory rise, Indonesia exports

SINGAPORE — Nickel prices fell on Monday, as stocks in China’s exchange warehouses rose to a one-and-a-half-year high and top ore producer Indonesia resumed exports.

Three-month nickel on the London Metal Exchange (LME) declined 1.2% to $15,995 a ton by 0443 GMT, while the most-traded nickel contract on the Shanghai Futures Exchange (ShFE) SCFcv1 fell 1.6% to 124,530 yuan ($17,805.01) a ton.

Data on Friday showed nickel inventories in warehouses tracked by ShFE rose to their highest since the week ended June 1, 2018 at 30,831 tons, easing worries that supply is tight.

Last week, Indonesia said it had allowed some nickel ore exporters to resume shipments following a temporary halt to investigate reports of violations.

“The fundamentals seem to be not good, especially with bad demand from the stainless steel sector,” said a China-based analyst, adding inventories of stainless steel in China, the top consumer of nickel, are still high.

Nickel has been the best performer this year among base metals, with LME nickel rising some 50%, supported by a fear of a shortage in supplies from Indonesia, after it announced a ban on exports from the beginning of next year.

The difference between LME cash nickel and the three month contract flipped to a discount of $1 a ton, from a premium of as much as $39 last week, signalling that nearby supply is less scarce.

Shanghai lead dropped to as low as 15,895 yuan a ton, its lowest since July 15, after ShFE stocks climbed 34.7% in a week to 28,850 tons on Friday, their highest since Aug. 30.

US President Donald Trump on Friday said he has not agreed to rollback of US tariffs sought by China, sparking fresh doubts about when the world’s two largest economies may end a trade war that has hurt global growth.

China Molybdenum Co. said it planned to take an indirect 30% stake in an Indonesian nickel project to increase exposure to the growing market for battery metals.

Global refined copper output rose in October, fueled by strong smelting activity in China, according to an index based on satellite surveillance of copper plants.

LME copper eased 0.2% to $5,910 a ton; aluminum edged up 0.1% to $1,808.50 a ton; lead gained 0.4% to $2,114.50 a ton; and tin inched up 0.2% to $16,725 a ton. ShFE copper fell 0.5% to 47,230 yuan a ton; aluminum dipped 0.7% to 13,940 yuan a ton; zinc slipped 0.6% to 18,570 yuan a ton; while tin rose 0.3% to 137,580 yuan a ton. —