Nickel prices fell to their lowest levels in almost eight months in official trading on the London Metal Exchange on Thursday October 23, as risk aversion and concerns about China’s economy continued to weigh on base metals prices.

Three-month nickel settled at $15,000/25 per tonne, compared with $15,202 at the open.

An increase in the the flash HSBC Chinese manufacturing purchasing managers' index to 50.4 for October was not enough to offset the effect of weak equities in Asia today.

“The [PMI] level had been expected to remain unchanged. However, this is providing virtually no impetus for metal prices this morning since most Asian stock markets are in negative territory, indicating a continuing high level of risk aversion among investors,“ an analyst said in a note.

Nickel prices gained more than 40% in the first half of the year after Indonesia banned raw materials exports.

But prices plummeted in May and have remained low due to a slower-than-antipcated drawdown in nickel ore stocks, a relentless increase in LME stocks and concerns about China’s economy.

“On-warrant stocks keep going up and the Indonesian effect is not yet visible. The price has probably overshot on the downside but fundamentally it’s still bearish, short term,” a trader told Metal Bulletin.

“What we need now is for the bullish momentum to re-accelerate and when this happens the market needs to be convinced that the Chinese economy has not had a hard landing,” the trader added.

Nickel stocks on LME-approved warehouses rose 528 tonnes to 377,538 tonnes.

Three-month copper settled at an official price of $£6,665/68 per tonne, compared with an opening price of $6,642.

The red metal traded to an intraday high of $6,691.75 per tonne and dipped as low as $6,629.25.

Copper stocks in LME-listed warehouses fell by 25 tonnes to 157,500 tonnes.

Aluminium, basis three months, settled at $1,986/6.50 per tonne, after starting the day at $2,001.25.

The contract traded to an intraday high of $2,010 per tonne and dipped as low as $1,982.

Stocks of the light metal in LME-bonded warehouses fell by 8,425 tonnes to 4,474,500 tonnes.

Janie Davies
Twitter: @janiedavies_mb