September 19, 2017 / 10:31 AM / in 10 months

CORRECTED-METALS-Nickel falls towards 1-month lows on fund selling

 (Corrects headline)
    * LME/ShFE arb:
    * Market waiting for outcome of Fed's two-day meeting on

    By Pratima Desai
    LONDON, Sept 19 (Reuters) - Nickel prices fell on Tuesday
towards the one-month lows hit last week as funds took profits,
but concern about supplies from the Philippines and healthy
demand, particularly from Chinese stainless steel mills, are
expected to lend support.
    Benchmark nickel         on the London Metal Exchange was
down 2 percent at $11,015 a tonne at 1007 GMT from an earlier
$10,945. Last week the contract touched $10,845, its lowest
since Aug. 18.
    "Nickel rose about 40 percent between July and early
September, overshooting to above $12,000, speculators are
selling," said Societe Generale analyst Robin Bhar.
    "We estimate marginal production costs at around
$10,400/$10,500, that will be an anchor for the downside. Demand
from stainless and non-stainless applications is healthy."
    SPECS: "Nickel has seen the speculative long decline from a
high of 47 percent of open interest on Sept. 6, to our latest
estimate of 27 percent of open interest, or 43,000 lots,"
analysts at Marex Spectron said. One nickel lot is 6 tonnes.
    PHILIPPINES: Philippine lawmakers last month filed a bill
seeking to ban mining in watershed areas and exports of
unprocessed ores and require miners to get legislative approval
before operating. The Philippines is the world's top nickel ore
    INDONESIA: However, rising exports of nickel ore from
Indonesia, another top producer, are expected to cap prices. To
date, Indonesia has issued export permits for 8.2 million tonnes
of annual nickel ore exports             
    STAINLESS: About two-thirds of global nickel demand,
estimated at around 1.9 million tonnes, will be used to make
stainless steel. 
    STOCKS: Nickel stocks in LME approved warehouses have held
steady between 360,000 and 390,000 tonnes for much of this year,
but lower cancelled warrants -- metal earmarked for delivery --
are weighing on prices.
    NICKEL DEFICIT: Data from the International Nickel Study
Group showed the nickel market deficit at 400 tonnes in June
compared with a 6,700 tonne shortfall in May.             
    TECHNICALS: Support on the downside kicks in at $10,919, the
bottom of the Bollinger Band. The 55-day moving average at
around $10,600 comes next and that is followed by a Fibonacci
level at $10,530. 
    CHINA: Overall industrial metals were under pressure from
weak property market data from China, which accounts for nearly
half of global demand for industrial metals.             
    ZINC: Prices of the metal used to galvanise steel were down
0.2 percent at $3,091 a tonne. Zinc         is holding above
$3,000 on expectations of shortages, but higher prices are
likely to mean idled capacity is dusted off, production raised
and new capacity brought forward.
    ELSEWHERE: Copper         was up 0.2 percent at $6,541 a
tonne, aluminium         was up 1.1 percent at $2,112, lead
        gained 0.2 percent to $2,396 and tin         slipped 0.2
percent to $20,655 a tonne. 

 (Editing by Louise Heavens)
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