Shanghai Futures Exchange nickel dropped 2.2 percent on Thursday as traders said prices were correcting after they surged by 10 percent across an industry week in London last week. ShFE copper also slipped 1 percent to 53,230 yuan ($8,026) a tonne. Shanghai aluminium fell 2.7 percent to its weakest since early August amid speculation that China's war on pollution could also hit manufacturers of aluminium products and curb demand.
The nickel market had been ignoring downside risks from policy developments in Indonesia and the Philippines, and instead was focusing on potential future demand from electric vehicle batteries, said Morgan Stanley in a report. "We (have) heard little to alter our view that producing NiSO (nickel sulphate) isn't particularly challenging/costly and we see near-term downside risk to price," it said.