Nickel, zinc drop to new lows on weakness in steel, iron ore

5 June 2017

Nickel fell to its weakest levels in nearly a year on Friday while zinc hit a two-week low, pressured by weaker iron ore and oil prices plus concern about demand in top consumer China.

Zinc prices were also knocked by a jump in available inventories, showing that supplies were adequate despite the closure of major mines last year.

Both zinc and nickel are used in the steel industry so are sensitive to iron ore and steel prices while oil is a key input in mine production.

“The steel-related metals such as nickel and zinc are among the worst performers, feeling the pinch from iron ore. Oil is not helping. It’s crashing after the disappointment from the OPEC meeting,” Gianclaudio Torlizzi, Partner at consultancy T-Commodity in Milan, said.

* ZINC: Benchmark zinc on the London Metal Exchange had declined 1.1 percent to $2,542 a tonne by 1350 GMT after touching $2,512, the weakest since May 18.

* NICKEL: LME nickel fell 0.4 percent to $8,805 a tonne, the weakest since June 8 last year. Nickel declined for a third straight month in May and has shed 12 percent this year, the biggest drop among major base metals.

* COPPER: Three-month LME copper declined 0.9 percent to $5,650. “The market is stalling into a down trend channel from February’s $6,204 high,” Alastair Munro at Marex Spectron said in a note. A break below $5,602 would open up the potential for a move to $5,500, he added.

* Aluminium lost 0.4 percent to $1,919, lead, was flat at $2,110 while tin dropped 0.9 percent to $20,275.

Source-dailymail.co.uk