Nickel’s decline comes after a 0.6% rise at Monday’s close, when it stood at $16,340 per tonne. The metal bottomed at $15,665 per tonne earlier this morning, the lowest intraday reading since late November 2020, just slightly above its 200 daily moving average of around $15,500 per tonne.

“There are cross currents flowing through the market, the Dow Jones Industrial Index set a fresh intraday high on Monday [at 32,010.25], while China’s CSI 300 set a fresh low for the year earlier in the day and is some 16% below the high seen in February,” Fastmarkets head of base metals and battery research William Adams said in a morning note.

“The market is wary that all the extra stimulus will be inflationary, but for the metals, inflation should be supportive as indeed should the stimulus spending, so it just a case of whether a deeper sell-off in equities drags metals down too for a while,” Adams said.

“As we have been saying of late, this correction should let us see how strong underlying demand really is by seeing how far prices pull back and how long they pullback for. We remain medium-term bullish on the back of another super-cycle, this time driven by the electrification theme,” he added.

The three-month aluminium price, meanwhile, was down by 1% at $2,148 per tonne on Tuesday from Monday’s 5pm price of $2,171 per tonne, which itself was a decline – albeit a smaller one – of $5 per tonne from last Friday’s closing price.

LME aluminium stocks continue to decline, with a fresh outflow of 6,400 tonnes on Tuesday, largely from Port Klang (4,250 tonnes) and Singapore (1,500 tonnes), following a similar outflow seen on Monday. There was also a further 6,500-tonne cancellation.

At 1,286 million tonnes, total LME aluminium stock are at their lowest since the middle of January.

Elsewhere, lead’s three-month price rebounded slightly from its 1% drop to $1,978.50 per tonne on Monday, up to $1,985 per tonne on Tuesday morning. The metal closed below the $2,000-per-tonne mark for the first time since mid-January.

“Lead prices look set to remain under pressure in the coming session while prices continue to correct. While prices are approaching oversold levels, they still have room below and could look to target the December 22, 2020, low at $1,929 per tonne,” Fastmarkets analyst James Moore said.

Other highlights
  • The US Dollar Index eased to 92.05 at 9am on Tuesday, despite hitting 92.51 during earlier trading, the most since November 24, 2020.
  • Copper’s price fell on Tuesday to $8,893.50 per tonne, similar to its closing price on Friday at 5pm, following a 1.1% increase to $8,998.50 per tonne on Monday.
  • Total copper stocks at LME warehouses rose to 85,050 tonnes on Tuesday, with a 1,375-tonne inflow into Singapore, their highest since late January.
  • Economic data out later on Tuesday includes Germany’s trade balance, Italian industrial production, EU final employment change, EU revised gross domestic product and the US small business index from the National Federation of Independent Business.