London Metal Exchange (LME) nickel prices sank to end Thursday's floor trading seven percent down on technical selling by funds, as worries faded about a labour strike in Canada, dealers said. Three-months prices closed at $13,000 a tonne, down $975 from Wednesday's kerb close and some $1,500 since Monday.
"It was absolutely fund sales and when prices broke $13,800 a tonne selling was relentless and heavy," a dealer said, adding that there was a record volume of nickel traded on the LME's electronic trading platform Select.
"The market now has trade support between $12,500 and $13,000, which ought to arrest the decline," the dealer added.
Traders expected unionised workers at Inco's Thompson, Manitoba, nickel mining and processing site to ratify a new three-year contract on Thursday.
The ratification vote will be held on from 1930 to 2030 local time (0030 to 0130 GMT).
The company, the world's second-biggest nickel miner, has produced its first nickel concentrate from its Voisey's Bay mine in Labrador on Canada's East Coast, it said on Thursday. Inco said it remains on target to see the first shipment of concentrate from the Voisey's Bay project in November 2005.
Output from the site is expected to be approximately 110 million pounds of nickel-in-concentrate in 2006.
LME stocks of the metal have also been rising in the summer and currently stand at around 10,700 tonnes, up 60 percent since early July and their highest level since March.
Analysts said market sentiment was also being affected by talk of a concerted move back to producer pricing. The sell-off in nickel sparked losses in other metals.
Copper was down $27 to $3,538, while aluminium was at $1,826, down $24.
Zinc was at $1,365, down $25, while lead was at $852, down $11. Tin dropped to a new low since February 2004, standing at $6,550, down $175.
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