Nickel Has Biggest Monthly Loss Since November as Dollar Climbs

Jul 31, 2014 3:07 pm ET

July 31 (Bloomberg) -- Nickel fell to cap the biggest monthly drop since November as the dollar’s rally eroded the appeal of industrial metals as alternative investments.

The greenback headed for the biggest monthly gain since May 2013 against a basket of 10 major currencies as U.S. unemployment claims in the past four weeks fell to the lowest since 2006. This year, nickel inventories tracked by the London Metal Exchange have climbed 21 percent to a record 315,798 metric tons. Prices from aluminum to zinc dropped in London.

“Although base metals seemed to have shrugged off the stronger dollar yesterday, we think the complex may have trouble continuing to do that over the short term,” Edward Meir, an analyst at INTL FCStone in New York, said in a note.

Nickel for delivery in three months fell 2.4 percent to settle at $18,505 a ton 5:50 p.m. on the LME. This month, the price dropped 2.8 percent.

The metal has climbed 33 percent this year, partly because Indonesia in January barred shipments of unprocessed ores, spurring concerns that supplies will trail demand.

Copper fell 0.1 percent to $7,115 a ton ($3.23 a pound). Lead and tin also dropped.

On the Comex in New York, copper futures for September delivery declined 0.3 percent to $3.231 a pound.

In July, the price climbed 0.9 percent. The fourth straight monthly gain marked the longest rally since February 2011. Global stockpiles monitored by exchanges in Shanghai, London and New York have slumped 47 percent in 2014 to 270,588 tons.