Nickel Falls as Stockpiles Signal Slowing UsaAccording to Bloomberg:
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Nickel Falls as Stockpiles Signal Slowing Usage; Copper Rises
By Brett Foley
May 24 (Bloomberg) -- Nickel fell to a two-month low in London as an increase in stockpiles fueled speculation stainless-steel producers are reducing usage of the metal. Copper gained.
Inventories of nickel tracked by the London Metal Exchange rose for a fourth day, the exchange said in a daily report, taking the gain this week to 44 percent. Stainless-steel makers such as ThyssenKrupp AG, the world's biggest, and South Korea's Posco have said they plan to increase output of nickel-free products to cut costs.
``Until recently the market has been ignoring a number of bearish factors such as clear signs that demand in the stainless-steel market has slowed and increasing levels of substitution,'' Stephen Briggs, an analyst at Societe Generale in London, said today in a telephone interview. ``Rising stockpiles have been the trigger for a change in sentiment.''
Nickel for delivery in three months on the LME fell $400, or 0.9 percent, to $45,800 a metric ton as of 9:26 a.m. local time, paring this year's gain to 37 percent. Earlier, the contract fell as low at $45,100, the lowest since March 30.
Nickel production will outpace usage by 70,000 metric tons this year, the International Nickel Study Group said May 14. Stockpiles monitored by the LME rose by 5.4 percent to 7,200 metric tons today. They surged 27 percent yesterday, the most since Sept. 11, 2003.
Among other LME-traded metals, copper advanced $79, or 1.1 percent, to $7,280 a ton, aluminum added $1 to $2,822 and zinc increased $19 to $3,669. Lead slid $10 to $2,120 a ton and tin lost $25 to $13,800.
To contact the reporter on this story: Brett Foley in London at bfoley8@bloomberg.net .
Last Updated: May 24, 2007 04:47 EDT