Nickel slips on demand worries

Print this page Posted on : 05-28-2008 by recycleinme.com

Industrial metal nickel fell more than 2 per cent on the London Metal Exchange on Tuesday as investors worried about slowing demand for stainless steel, its main consuming market.

Nickel prices have fallen 10 per cent since the start of the year to a quote of $23,650/23,850 a tonne by 1051 GMT, down $450 from Friday's close and less than half its price in May last year. Investors sold the metal on the basis that demand growth for stainless steel may falter if the overall economic outlook worsens. Among other metals copper, an increasingly popular alternative investment, and a key gauge of underlying economic activity, was down $25 at $8,205/8,215 a tonne.

In the copper market, analysts continue to worry about the absence of Chinese restocking, noting a sharp decline in Chinese imports versus record-breaking shipments in the first few months of 2007. ''With talk of weak demand ... apparently calmer labour relations in Chile and a reduction of the drought risk there we favour further weakness in copper and would only look to buy the metal at $7500/t or below,'' UBS analyst Mr John Reade said in a report.

Aluminium gains

LME aluminium rose $14 to $3,015/3,020 a tonne on concerns that higher energy prices could derail smelter expansion plans, while demand continues to surge. Norwegian aluminium group Norsk Hydro said overnight that aluminium markets were stronger than expected and prices were more likely to rise than fall. Zinc was up $35 at $2,180/2,190 a tonne, lead was up $26 at $2,035/2,045 a tonne, and tin was up $150 at $23,900/24,000 a tonne.

Source : Business Line