Nickel prices plunged below $16,000 during official trading on the London Metal Exchange on Wednesday October 1, as Chinese participants left the market for the Golden Week holiday.

The alloying metal settled at $15,960/65 per tonne on a three-month basis, down from $16,595/600 on Tuesday, with a cash to three-month contango of $110.

“The LME’s taken a hit – it’s China, China, China. More stocks [have come in], but it’s also technical,” a physical nickel trader said.

“The chart showed resistance at $16,400. When it passed that, it just looked to the next level, which was at $15,700-15,800, for support.”

Nickel stocks were up another 2,334 tonnes in LME-listed sheds, to 358,374 tonnes, after deliveries into Vlissingen and Johor.

Metal Bulletin has reported on how low rents, low freight rates and other incentives are encouraging stockholders to send material to locations outside China in the wake of the Qingdao port probe.

Tin prices also took a further knock on Wednesday, settling at $20,225/250 per tonne on a three-month basis, compared with $20,300/350 on Tuesday.

“I really don’t know what’s happening. We’ve seen big drops before, but this has been so sustained. It’s now far below what [producers] would call a reasonable price,” a second physical trader said.

“Stocks are reducing as well. Something’s got to give at some point, [but] there’s no sign of any support. There was no rush of interest because the price dropped.”

Stocks of the soldering metal were down another 215 tonnes in LME-listed sheds, to 8,380 tonnes, following a delivery out of Singapore.

Markets were also affected by news of further pro-democracy protests in Hong Kong, an analyst said in a note.

“The LME group has been hit hard by the impact of both a stronger dollar and more recently, by growing concern about the massive demonstrations in Hong Kong,” he said.

“We think this is a serious issue and could outrank the Russian invasion of Crimea in terms of its potential impact on the markets.”

Copper, for example, was on track for its biggest monthly loss since March as markets closed on Tuesday, the analyst said, but bounced back slightly during official trading on Wednesday.

The red metal settled at $6,710/712 per tonne on a three-month basis, compared with $6,686/87 on Tuesday.

Stocks of copper were down 275 tonnes in LME-listed warehouses overnight, to 152,275 tonnes. 

Claire Hack
Twitter: @clairehack_mb!/@clairehack_mb