METALS-Nickel falls on subdued consumption, rising inventories

Credit: REUTERS/EVGENIA NOVOZHENINA

Updates prices

Dec 21 (Reuters) - Nickel prices fell on Thursday, pressured by muted consumption as well as increasing production and inventories in exchange warehouses.

Three-month nickel on the London Metal Exchange CMNI3 fell 1.1% to $16,670 per metric ton by 0709 GMT, and the most-traded January nickel contract on the Shanghai Futures Exchange SNIcv1 dropped 1.3% to 129,830 yuan ($18,169.22) a ton.

On a year-to-date basis, LME nickel is down 44.5% and SHFE nickel has dropped 35.4%, making the metal the worst performer across the nonferrous metals complex on the two bourses.

Indonesia in recent years has seen a huge increase in investments into downstream nickel production, and some Chinese producers in the past year also ramped up their nickel cathode output, creating a surplus in the global nickel market.

"Nickel supply continues to grow, but consumption has not improved. The surplus pattern continues, and nickel supply and demand are bearish," said Huatai Futures in a report.

Nickel stockpiles in LME-approved warehouses MNISTX-TOTAL were last at 53,724 tons, the highest level since Jan. 10. Inventories in warehouses tracked by SHFE NI-STX-SGH also climbed to 13,358 tons, the highest since Jan. 29.

Most recent deliveries into the LME system have been to warehouses located in South Korea, Taiwan, Singapore and the Netherlands.

China's nickel pig iron prices SMM-NIC-NPI15 also dropped to 907.50 yuan a ton by Dec. 19, down 33% from a year earlier.

LME copper CMCU3edged up 0.1% at $8,591 a metric ton, zinc CMZN3 declined 0.2% to $2,568, lead CMPB3was almost flat at $2,082, tin CMSN3 eased 0.3% to $25,125, while aluminium CMAL3 rose 0.2% to $2,245.50.

SHFE copper SCFcv1rose 0.1% to 68,980 yuan a metric ton, tin SSNcv1was flat at 209,070 yuan, lead SPBcv1 increased 0.1% to 15,660 yuan, while aluminium SAFcv1 rose 0.3% to 18,995 yuan and zinc SZNcv1 increased 0.5% to 21,165 yuan.

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($1 = 7.1456 yuan)

(Reporting by Mai Nguyen in Hanoi; Editing by Rashmi Aich and Eileen Soreng)

((mai.nguyen@thomsonreuters.com; Reuters Messaging: mai.nguyen.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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