February 5, 2018 / 5:46 AM / 7 months ago

METALS-London nickel steadies above week lows, at risk of further losses

 (Updates prices)
    By Melanie Burton
    MELBOURNE, Feb 5 (Reuters) - London nickel climbed on Monday
after posting its largest daily loss in two months in the
session before, but prices were seen tailing off ahead of the
Lunar New Year next week.
    "Aside from the strengthening dollar, we think concerns
about China's weak demand (have) also weighed on the nickel
price," said broker Argonaut Securities in a report. 
    Some of China's stainless steel mills, the major consumers
of nickel, are losing money at current prices and have already
wound down their operations, it said. 
    "Looking into February, a week long Chinese Lunar New Year
will further dampen production and demand. More steel plants are
expected to arrange care and maintenance therefore production of
stainless steel is expected to contract further," it said. 
    "We expect to see price weakness in nickel going forward." 
    
    FUNDAMENTALS
    * NICKEL: London Metal Exchange Nickel cut early
losses to trade up 0.4 percent, paring Friday's 4 percent plunge
that was also fanned by expectations of a glut due to growing
nickel ore exports from Indonesia. 
    Shfe nickel was down 2 pct.
    * COPPER: LME copper firmed by 0.7 percent amid a
flat-to-lower complex. It traded at $7,090 a tonne by 0727 GMT.
Prices dropped 1 percent on Friday when they hit the highest in
a week at $7,188.50 before falling into the close. 
    On the Shanghai Futures Exchange where prices have trended
lower since late December, copper stayed down by 0.3
percent at 53040 yuan ($8,425) a tonne.
    * US ECONOMY: U.S. job growth surged in January and wages
increased further, recording their largest annual gain in more
than 8-1/2 years, bolstering expectations that inflation will
push higher this year as the labour market hits full employment.

    * PERU PRODUCTION: Higher supply overhung the market after
Peru, the world's No. 2 copper and zinc producer, reported a
substantial rise in production. Copper production grew 3.9
percent to 2.4 million tonnes and zinc production surged by 10.2
percent to 1.5 million tonnes.
    * LEAD: Lead prices took a breather from a
6-1/2-year top of $2,685 from Friday to tail back by 0.7
percent. 
    * ALUMINIUM: Russian aluminium maker Rusal said on
estimated that China's winter capacity cuts will curb output by
1 million tonnes annually.
    * INVESTORS: Hedge funds and money managers cut their net
long position in COMEX copper in the week to Jan. 30, U.S.
Commodity Futures Trading Commission (CFTC) data showed.

    * MARKETS: Asian share markets stumbled on Monday as fears
of resurgent inflation battered bonds, toppled Wall Street from
record highs and sparked speculation central banks globally
might be forced to tighten more aggressively.    
    * COMING UP: Euro zone Retail sales for Dec at 1000 GMT
     
    PRICES    
 BASE METALS PRICES                      0709 GMT           
 Three month LME copper                                 7091
 Most active ShFE copper                               53040
 Three month LME aluminium                              2208
 Most active ShFE aluminium                            14315
 Three month LME zinc                                 3514.5
 Most active ShFE zinc                                 26805
 Three month LME lead                                 2659.5
 Most active ShFE lead                                 19535
 Three month LME nickel                                13500
 Most active ShFE nickel                              102230
 Three month LME tin                                   21660
 Most active ShFE tin                                 150100
                                                            
 BASE METALS ARBITRAGE                                      
 LME/SHFE COPPER                  LMESHFCUc3         1109.29
 LME/SHFE ALUMINIUM               LMESHFALc3        -1773.19
 LME/SHFE ZINC                    LMESHFZNc3          500.41
 LME/SHFE LEAD                    LMESHFPBc3         -613.58
 LME/SHFE NICKEL                  LMESHFNIc3          1508.1
 

($1 = 6.2958 Chinese yuan renminbi)

    
 (Reporting by Melanie Burton; Editing by Sunil Nair and Vyas
Mohan)
  
 
 
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