Nickel at 2-year low on weak stainless steel demand

Print this page Posted on : 07-25-2008 by recycleinme.com

Nickel fell below $20,000 a tonne on Thursday for the first time in just over two years on weaker stainless steel demand, while copper prices were capped by a strengthening dollar and weak macroeconomic data. London Metal Exchange nickel dropped 3 per cent to $19,400 a tonne, its lowest since June 2006, before trading at $19,650 by 0952 GMT.

On Wednesday it closed at $20,000, after falling 2.7 per cent on weaker demand from stainless steel producers, accounting for about two thirds of global nickel demand. Copper for delivery in three months traded at $8,105 a tonne, up from $8,080 at the close on Wednesday. Aluminium gained to $3,020 a tonne from $3,006.

Nickel stocks

LME nickel stocks rose 180 tonnes to 43,368, although inventories are down 17 per cent over the last three months. ''We will see how long the decline in nickel stocks will last,'' Mr Toyne said. ''Markets are still soft for stainless steel with demand getting weaker in Europe.'' ''We are in a seasonal slowdown so I expect some recovery in the fourth quarter, but as you go into next year I am a bit worried given the macro backdrop,'' he added. Elsewhere, tin traded at $22,900 a tonne from $23,100 on Wednesday, while zinc gained $15 to $1,940 and lead traded lower at $2,190 from $2,214.

Source : Business Line