Nickel jumps to 2-week peak on short covering, China hopes
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
(Updates with closing prices)
By Eric Onstad
LONDON, May 24 (Reuters) - Nickel spiked to its highest
level in over two weeks on Friday as bearish investors covered
positions, while other industrial metals gained on a weaker
dollar and hopes for a U.S.-China trade deal.
World stocks edged higher and oil prices also recovered from
bruising falls this week after U.S. President Donald Trump
nurtured hopes of progress in U.S.-China talks.
"With the stock markets popping up a tad this morning and
also the dollar strength pausing, that's giving the market an
excuse to cover some shorts ahead of the weekend, which is a
long weekend in the UK and US," said Ole Hansen, head of
commodity strategy at Saxo Bank in Copenhagen.
"But we are by no means out of the woods yet, if anything,
it may just be the market pausing before we hit the next
Benchmark nickel on the London Metal Exchange surged
nearly $500 in about 10 minutes in the morning, spurred by
Chinese investors covering short positions, traders said,
continuing the rally in the afternoon.
That sent nickel surging 5% to a peak of $12,495 a tonne,
the highest since April 30, before paring gains in closing open
outcry activity to a bid of $12,370, a rise of 4%.
The move higher in nickel gained steam as it broke through
its 200-day moving average, a key technical level, traders said.
* COPPER: Three-month LME copper climbed 0.5% to
finish at $5,955 a tonne in closing rings, but on a weekly basis
it marked a sixth consecutive decline.
* DOLLAR: The dollar index edged away from two-year
highs on Friday after weak U.S. manufacturing activity data. A
weaker dollar makes dollar-denominated metals cheaper to
importers using other currencies.
* NICKEL FORECAST: Fitch on Friday revised down its London
three-month nickel average price forecast for 2019 to $13,250 a
tonne, from $14,500 estimated earlier, on rising global economic
risks, an escalating trade dispute and disappointing refined
nickel demand from China so far this year.
* TIN SPREAD: The premium of cash LME tin over the
three-month contract <CMSN0-3> jumped to $320 a tonne, the
highest since April last year, indicating tight availability of
* ZINC: LME zinc climbed 1.6% to end at $2,560 a
tonne. The net speculative short position on the LME had
expanded to 7.2% of open interest by the close on Wednesday,
back to levels not seen since October 2018, according to
Alastair Munro at broker Marex Spectron.
* ALUMINIUM: Strong aluminium output is expected for the
rest of the year due to falling costs, Commerzbank said in a
note. "We believe that the continuing high supply, coupled with
the decline in demand dynamism, argues against any sustained and
significant recovery of the aluminium price."
* PRICES: LME aluminium added 0.1% to close at
$1,800 a tonne, lead gained 0.9% to $1,825 and tin
, untraded in closing rings, was bid down 0.1 percent at
$19,300 a tonne.
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(Additional reporting by Mai Nguyen in Singapore, editing by
Louise Heavens and Susan Fenton)
First Published: 2019-05-24 04:14:16
Updated 2019-05-24 18:14:37
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