China demand concern push nickel to 10-month low; copper rises

Nickel prices hit 10-month lows on Wednesday as worries about demand from top consumer China were reinforced by its trade data, which showed falling imports of the metal used to make stainless steel. Benchmark nickel on the London Metal Exchange ended 1 percent down at $9,225 a tonne from an earlier $9,220, its lowest since June last year.
SP Angel analyst John Meyer said he expects nickel to be supported by concern about supplies of ore from the Philippines, which last month ordered the closure of more than half the nation's mines to protect water resources, but added: "There is still a lot of stock for the market to burn."
LME warehouse stocks at 379,338 tonnes account for about 20 percent of global nickel consumption estimated at about 2 million tonnes this year. Traders say off-exchange inventories could also amount to about 400,000 tonnes.
China's nickel imports in the first three months of the year were 43,382 tonnes, down 60 percent from the same period last year.
Stocks in LME warehouses have fallen below 1.66 million tonnes to their lowest since 2008. Aluminium closed up $1 at $1,964 a tonne, not far from the 27-month high of $1,981 hit in March.
Goldman Sachs expects aluminium to be at $2,000 and $2,100 in six and 12 months time respectively. "This strong performance has reflected an increase in the potential for aluminium to be the next target of supply-side reform in China, a tightening ex-China balance and rising costs of production."
A large holding - between 40 percent and 49 percent of lead inventories and cash contracts - is adding to worries about supplies on the LME market created by more than 50 percent of warrants earmarked for delivery.
The pace of expansion in China's manufacturing sector is likely to have slowed in April, a Reuters poll showed, as factory gate prices lost steam and authorities moved to tackle risks in the property market and credit growth.
Industrial metals overall could come under pressure from a stronger US currency that could potentially weaken metals demand. When the dollar gains in value it makes commodities more expensive for holders of other currencies.
Copper rose 0.2 percent to $5,715, zinc gained 0.8 percent to $2,626 and lead was up 0.7 percent at $2,185. Tin climbed by 1.4 percent to $19,900.