Nickel, copper fall following recent gains

Bareksa.com - Nickel fell on Wednesday as investors cashed in on gains after the price reached a 27-month peak last week, while a shortage of the metal following an ore export ban by Indonesia helped limit the downside.

Three-month nickel on the London Metal Exchange (LME) dropped 1.6 percent to $19,541 a tonne at 0942 GMT.

Nickel, which hit its highest since February 2012 at $21,625 a tonne last week, has lost 4 percent of its value since Monday's close.

"Nickel is no doubt under pressure because traders are trying to find the correct price, given that we had such a massive move for the metal," Naeem Aslam, chief market analyst at Ava Trade, said.

But it still shows a large gain for the year to date after top producer Indonesia banned the export of unprocessed ores from January.

"Let's not forget that we are still up nearly 40 percent this year, which is a very hefty gain. Indonesia's export ban should also help to level the demand with supply," Aslam said, adding that nickel could test the next support level of $18,783.

China's ore imports from Indonesia slumped by 90 percent, customs data showed, but its exports of refined nickel more than tripled.

Spot supplies are in high demand, and the LME cash-to-three-month spread, which is still contango, reached its narrowest since January 2012 on Monday. <CMIN0-3>

COPPER SLIPS

Benchmark LME copper fell 1 percent to $6,816.50 a tonne, extending losses in the previous session.

Copper prices neared $7,000 a tonne late last week, clawing back 10 percent from a March trough amid falling stockpiles and tight supply in China. But gains have spluttered out as consumers have preferred to wait for prices to fall before making fresh purchases.

"After the run we've seen in copper, it should be ready for a correction," said analyst Dominic Schnider of UBS Wealth Management in Singapore.

Also reflecting a slowdown in nearby demand, LME cash copper prices have fallen against the benchmark, while in Shanghai, premiums have edged down $5 to $115-$135 in the past few days, according to China-based price provider Shmet.(http://www.shmet.com/)

Moody's on Wednesday lowered its outlook for China's property industry, a large copper consumer, to negative from stable, reflecting expectations of slower residential sales growth, high inventory levels and weakening liquidity over the next 12 months.

Chinese imports of refined copper jumped by 86.5 percent in April from the previous month, extending gains made in March as stronger domestic prices boosted their appeal.

In industry news, Goldman Sachs has begun a formal process to sell the metals warehousing business it purchased four years ago, a spokesman said on Tuesday, disclosing the first definitive effort to shed the operation amid regulatory and political pressures. (Source : Reuters)