Nickel Outlook:Nickel Falls in London on Higher Inventories, Demand Outlook
By Claudia Carpenter
Jan. 28 (Bloomberg) -- Nickel fell for a second day in London as increased inventories signaled demand from stainless- steel makers, the biggest user, has yet to pick up. Copper, aluminum and zinc also declined.
Nickel inventories in warehouses monitored by the London Metal Exchange increased 0.3 percent to 46,806 metric tons, the highest since Jan. 14. Metal earmarked for delivery out of LME- registered warehouses is 900 tons, less than half the total in November. The drop in so-called canceled warrants indicates a reduction in demand.
``There's too much stock and not enough demand,'' said Michael Jansen, an analyst at J.P. Morgan Securities Ltd. in London. ``There's still a decent amount of stainless-steel inventories and the mills are reluctant to increase production until they get stronger orders.''
Nickel for delivery in three months dropped $225, or 0.8 percent, to $26,650 a ton as of 11:37 a.m. on the LME. A close at that price would be the lowest this year.
A ``procession of lower lows'' suggests nickel may drop to $24,800 a ton by next month, said Dhiren Sarin, an analyst in technical strategy at Barclays Capital in London