Nickel futures on the London Metal Exchange (LME) closed sharply lower on Tuesday, with the rest of the complex following suit, as profit-taking became the order of the day after the metals' brisk New Year rally, analysts said.
Benchmark three-months nickel finished Tuesday's kerb at $15,200 a tonne, sharply down from $17,100 at Monday evening's kerb close and a far cry from the day's fresh 14-1/2 year high at $17,720.
"There is clear evidence of price dips being bought and any correction should be brief and shallow... Clearly these markets are very volatile at the moment and that should continue," Ingrid Sternby, base metals analyst at Barclays Capital.
In market news, unionised workers at Falconbridge's premier nickel facility said on Monday they are concerned about the slow pace and tenor of negotiations with the world's third-biggest nickel miner, which began on December 1.
A spokesman said local 598 of the Canadian Autoworkers Union would be pushing for wages and benefits for production and maintenance workers at the Sudbury, Ontario unit on par with those of members in auto plants in southern Ontario.
Talks to renegotiate a three-year contract expire on January 31.
Also heavily hit by profit taking on Tuesday was tin, which lost $300 on the day to close at $6,240 - substantially down from the metal's new 7-1/2 year high at $6,615 reached earlier in the session.
Tin's new support was pegged at $6,200.
Copper took more of a back seat on Tuesday, with losses comparatively limited. Prices ended at $2,342, versus $2,377 at the last kerb close.
"The longer-term target for the (copper) bulls remains $2,500 but at the moment this appears to be a bridge too far, although after recent activity it would be foolish to suggest that this level is beyond the realms of possibility," LME broker IFX said.
Aluminium also got off relatively lightly, closing at $1,607 from $1,613 previously.
IFX was upbeat about aluminium's prospects: "The new-found confidence surrounding the base metals complex at the moment should encourage fresh spec/CTA (commodity trade advisor) buying over the mid-term where the upside target remains a challenge of $1,650."
Zinc closed down $20 at $1,027, while lead dropped $10 to $728.