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LME nickel heads for fourth weekly drop on inventory build-up, profit-booking

Tan KW
Publish date: Fri, 14 Jun 2024, 06:12 PM
Tan KW
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HANOI London nickel prices slipped on Friday and were on track for a fourth straight weekly loss on rising inventories and profit-booking, while tin was set for a weekly gain on tightening supply.

Three-month nickel on the London Metal Exchange (LME) edged 0.5% lower to US$17,550 per metric tonne by 0818 GMT. The contract is down 2.7% this week.

The most traded July nickel contract on the Shanghai Futures Exchange (SHFE) shed 1.3% to 137,010 yuan (US$18,883.35) a tonne. The contract has lost 4% this week, set for a third straight weekly drop.

SHFE nickel stocks stayed around the highest since November 2020, while LME inventories climbed to 86,664 tonnes, their highest since February 2022.

The rising stockpiles were partly due to Chinese producers ramping up output of high-grade cathodes deliverable on the LME.

Investors also booked profit since nickel prices hit the highest since August 2023 in May, said CRU analyst Tong Tong, despite improving demand from the stainless steel sector and eroding supply growth in Indonesia in the second quarter.

“The market will shift into surplus in the third quarter, as Indonesian supply grows. Fundamentally, we expect a slightly quarter-on-quarter lower price for the third quarter,”  he said, as Indonesian mining quota approval accelerated.

LME tin inched up 0.6% at US$32,990 and was up 4.9% for the week.

“Monthly tin-in-concentrate shipments from Myanmar are expected to remain low for May and June,” said Tom Langston, an analyst at the International Tin Association, adding that refined tin exports from Indonesia had not rebounded strongly.

SHFE tin stocks begun to decline, and “tightening feedstock supply and expected smelter maintenance this summer could accelerate this drawdown,” Langston added.

LME copper was nearly flat at US$9,797.50 a tonne, while aluminium declined 0.4% to US$2,548, zinc dropped 1.3% to US$2,823.50, and lead edged down 0.6% at US$2,153.

SHFE copper declined 0.6% to 79,550 yuan a tonne, aluminium decreased 0.9% to 20,565 yuan, zinc shed 1% to 23,520 yuan, tin dropped 1.3% to 271,300 yuan, while lead rose 0.1% to 18,630 yuan.


  - Reuters


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