Nickel retreats for second day

July 10, 2014 06:18 AM

Nickel fell for a second day in London amid record-high stockpiles and speculation among some investors that Indonesia might ease January’s ban on exports of unprocessed ores after yesterday’s presidential election.

Inventories monitored by the London Metal Exchange climbed to an all-time high of 307,410 metric tons, data showed today. Unofficial counts showed Joko Widodo, opposing a candidate who is a product of the aristocracy that has governed Indonesia since independence in the 1940s, leading the presidential race.

“Looks like some in the market believe Indonesia may loosen restrictions,” Kevin Tuohy, head of European sales at INTL FCStone Europe Ltd. in London, said by e-mail.

Nickel for delivery in three months dropped 2.1 percent to $19,115 a ton at 1:25 p.m. on the LME. Prices slid 1.5 percent this week. Indonesia is the world’s biggest producer of the metal from mines.

Still, Australia & New Zealand Banking Group Ltd. said the export ban will probably remain in place and speculation about a relaxation if Widodo wins is misplaced.

Nickel surged as much as 56 percent this year in London and is still up 38 percent. Production will exceed demand by 50,000 tons this year before a deficit in 2015, BNP Paribas SA says.

Copper for delivery in three months lost 0.4 percent to $7,100 a ton on the LME. Futures for delivery in September fell 0.2 percent to $3.242 a pound on the Comex in New York.

Imports of the metal into China, the world’s biggest consumer, dropped to a 14-month low in June as demand to use copper as collateral to obtain credit slowed amid a probe of warehousing at the port of Qingdao. Inbound shipments of unwrought copper and copper products came to 350,000 tons, customs data showed.

“Chinese figures put a bit of pressure on the base complex,” RBC Capital Markets Ltd. said in a report today. “Some profit-taking took place overnight in light volumes.”

Copper stockpiles monitored by the LME fell 0.6 percent to 158,100 tons. Orders to remove the metal from warehouses declined 2.9 percent to 29,700 tons.

Tin fell for a sixth session in London, set for the longest run of declines since January. Aluminum, zinc and lead dropped.

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