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Nickel Tumbles as Traders Flee Amid Talk of Stainless Price Cut

Nickel Tumbles as Traders Flee Amid Talk of Stainless Price Cut

(Bloomberg) -- Nickel slumped the most in almost seven weeks on speculation that China’s top producer of stainless steel cut its prices.

The London Metal Exchange nickel contract for delivery in three months fell 3.2 percent to settle at $12,300 a metric ton at 5:50 p.m. on the London Metal Exchange, the lowest closing price since Oct. 31. The day’s losses almost wiped out this month’s gains for the metal used to make stainless steel.

“Traders are rushing to close long positions to limit losses” amid speculation Tsingshan Holding Group cut prices on products for December delivery, Wu Xiangfeng, an analyst at Huatai Futures Ltd., said by phone from Shanghai. An official at Tsingshan Holding declined to comment.

Nickel Tumbles as Traders Flee Amid Talk of Stainless Price Cut

Nickel has been a top performer among metals this quarter on bets that long-term demand from electric vehicles will lift prices. But China’s steel industry, the world’s biggest, holds the key to prices in the near-term and the market for cold-rolled stainless steel has moderated in recent weeks.

In other metals:

  • Copper fell 0.7 percent to $6,808 a ton, the lowest close in four weeks
  • Aluminum dropped 0.8 percent in London, following a 2.4 percent slump on the Shanghai Futures Exchange.
    • Traders in China are focusing on subdued demand conditions and rising inventory levels in SHFE warehouses, analysts at Commerzbank said in an emailed note
    • “We believe that the aluminum market is still amply supplied, and expect prices to fall further,” they said

--With assistance from Winnie Zhu and Luzi Ann Javier

To contact the reporter on this story: Mark Burton in London at mburton51@bloomberg.net.

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Tony Barrett, Nicholas Larkin

©2017 Bloomberg L.P.