Nickel rises, copper down

Nickel prices hit a 3-1/2 month peak on Friday as investors shifted from zinc after a build-up in zinc inventories indicated that shortages had eased. Rising physical demand from top consumer China also helped lift nickel. Both metals are mainly used in the steel sector with zinc needed for galvanising and nickel a key ingredient in stainless steel. "Traders are seeing a weakening scenario for zinc because the market is not as tight as people expected, while it's looking a bit more positive for nickel with Shanghai premiums rising," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
Benchmark London Metal Exchange nickel closed 0.7 percent higher at $10,200 a tonne after touching $10,290, the highest since April 6. Nickel gained 7.1 percent on the week. Tight supply pushed up nickel full-plate premiums in Shanghai to $200-$210 a tonne this week from $180-$200 last week, Metal Bulletin reported, the highest since it began nickel premium assessments in 2011.
On-warrant LME zinc inventories - those not earmarked for delivery and therefore available to investors - jumped 17 percent to 146,125 tonnes on Friday, having more than doubled in a little over two weeks. Zinc inventories on the Shanghai Futures Exchange climbed 8.3 percent to 78,320 tonnes over the past week.
Three-month LME zinc finished down 0.9 percent at $2,776 a tonne after climbing 18 percent from June 7 until Wednesday, when it touched $2,857. It gained around 1 percent this week. Three-month LME copper ended down 0.1 percent at $6,325 a tonne, but gained 5.4 percent on the week, the biggest weekly rise since February, while Comex September copper fell 0.1 percent to $2.88 a lb.
"Copper prices are in pursuit of breaking trend line resistance and moving to the 38.2 percent Fibonacci retracement area of about $3.00," Paul Ciana, technical analyst at Bank of America Merrill Lynch said in a note. LME tin dipped 0.3 percent to close at $20,600 a tonne after hitting a six-month high for the second straight day after reports of smelter shutdowns in Yunnan province in China, the world's largest tin producer. Aluminium finished down 1.6 percent at $1,907 a tonne and lead rose 0.5 percent to end at $2,320.