Nickel extends losses on weak stainless steel demand

Print this page Posted on : 07-26-2008 by recycleinme.com

Copper gained on Friday as Chinese demand was seen picking up and nickel bounced off its lows after heavy losses due to a lack of stainless steel demand. A weaker dollar underpinned prices but the market was looking to economic data from the US for more clues about the health of the economy and resultant demand for metals.

''The markets are uncertain, lacking a clear sense of direction,'' analyst Mr Leon Westgate at Standard Bank said. London Metal Exchange nickel fell 1.9 per cent to hit a low of $18,450 per tonne-the lowest since June 2006. By 1005 GMT nickel traded at $18,800, down from $18,800.

Copper, often seen as a key gauge of real economic activity, was up 0.5 per cent at $7,940 from $7,900 on Thursday. Nickel, a key ingredient in stainless steel, has shed around 30 per cent so far this year as demand has faltered expectations. Copper prices have fallen by 7 per cent this month.

The premium of Shanghai spot copper prices over futures prices has risen to 320 yuan ($46.89), up about $10, while the discount of Shanghai futures to LME, including tax, has narrowed to half what it was in early July. Shanghai futures need to be at a premium to LME futures for imports to be profitable. Copper warehouse stocks fell 4.3 per cent to 41,090 tonnes.

Aluminium gains

Aluminium gained $9 to $2,960, tin was steady at $22,350, zinc was also unchanged at $1,860, while lead shed 1.8 percent to $2,130.

Source : Business Line