Copper price leads metals lower while nickel eyes $18,000/t

Singapore 15/04/2014 – The nickel price finished an active Monday LME session firm and around a 14-month high but the rest of the complex were sideways to lower in Tuesday’s Asian session.

The markets will be closely watching data out of China this week, as Beijing is set to release half of its monthly data this week.

In yesterday’s US data, March retail sales rose 1.1 percent against a forecast 0.8-percent increase, while February business inventories were up 0.4 percent. Little impact was seen from the releases on the metals, although it did help US stocks markets to bounce from the previous week’s slump.

Markets are also focused on the intensifying conflict in Ukraine – News reports increased fears of outright military action, with the country’s president threatening military force after pro-Russian separatists occupying government buildings in the east ignored an ultimatum to leave, while a Russian fighter plane also flew provocatively low near a US ship in the Black Sea region.

The prospect of tougher sanctions on Russia is part of the reason driving nickel higher, with Russia producing around 12 percent of global refined nickel and is home to Norilsk Nickel, the world’s largest nickel producer.

Nickel could reach up to $20,000 per tonne “should Indonesia not back down [from its export ban] quickly following the early July presidential elections”, Goldman Sachs said.

Nickel, although technically overbought, extended its break above $17,000 amid the continuing fundamental backdrop of the Indonesian mineral ore export ban. It touched $17,917 per tonne, the strongest since February 19, 2013 yesterday, before concluding at $17,790, up $390. Today see prices trading between a range of $17,780 to $17,910, with current bid at $17,851 per tonne.

Copper led the base metals complex lower this morning, with prices currently at $6,616, coming off $50 from Monday’s close at $6,667. Stocks were down 3,375 tonnes at 244,950 tonnes, the lowest since November 2012.

“Copper price will remain rangebound until clear signals from China give some direction. The market’s main focus will be on Q1 GDP,” said analysts at RBC Capital.

Aluminium, which hit its highest since last October above $1,900 on Friday, dipped back below that level today and us $9 lower at $1,873. Inventories fell 6,800 tonnes to 5,344,275 tonnes, the lowest since March 18.

Lead and zinc are both lower than Monday’s kerb close- lead lost $4 to $2,116 per tonne while zinc lost $5.50 to $2,048.50. The latter saw a 3,300-tonne fall in inventories to 811,225 tonnes, the lowest for two weeks.

The tin price is lower as well, losing $92 this morning to $23,358 per tonne while stocks climbed 30 tonnes to 9,460 tonnes