Nickel Has Longest Slump in Five Months on Record-High Inventory

Jul 18, 2014 2:14 pm ET

July 18 (Bloomberg) -- Nickel prices fell to cap the longest slump in five months as inventories tracked by the London Metal Exchange rose to a record.

Stockpiles have climbed 19 percent this year to 311,088 metric tons, and open interest has dropped to a four-month low. Prices have jumped 34 percent this year, partly because Indonesia barred shipments of unprocessed ores, spurring concerns that supplies will trail demand.

“The LME stock rise reflects the reality that the global market remained in surplus during the first half of the year,” Macquarie Group Ltd. analysts, including Vivienne Lloyd in London, said in a report. “There’s no doubt to us that much of the rise in prices that took place up to May was speculative and anticipatory” of production deficits, they said.

Nickel for delivery in three months tumbled 2.8 percent to settle at $18,660 a ton at 5:58 p.m. on the LME, the biggest decline since May 15. The metal dropped for the fifth straight session, the longest slump since Jan. 30.

Copper in London fell 1.2 percent to $6,985 a ton ($3.17 a pound), the largest decline since June 6. Aluminum, zinc, lead and tin also dropped.

On the Comex in New York, copper futures for September delivery fell 1.1 percent to $3.1845 a pound. The price has declined 6.2 percent this year.

--With assistance from Maria Kolesnikova in London.