May 19, 2015 / 10:04 AM / 5 years ago

METALS-Nickel tumbles after inventories hit record, tin rises

* LME nickel stocks hit fresh record peak

* Euro slides against dollar after ECB comments, U.S. data

* Nickel sees biggest one-day drop in a year (Adds detail, fresh quotes, updates official closing prices)

By Eric Onstad and Liisa Tuhkanen

LONDON, May 19 (Reuters) - Nickel prices posted their biggest one-day fall in a year on Tuesday after inventories jumped to a record high, accentuating an overhang of supplies weighing on the market.

A wave of speculative selling also sent copper to a three-week low while most other base metals also fell, pressured by the strong dollar and weaker oil prices.

Three-month nickel on the London Metal Exchange closed 4.8 percent down at $13,090 a tonne. It tumbled more than 5 percent to an intraday low of $13,040, its biggest one-day percentage decline since May 2014.

“Nickel stocks keep rising and I don’t know what will stop it at the moment. Before the nickel price can rise sustainably, there’s a need to see lower LME stockpiles,” said analyst Daniel Briesemann at Commerzbank in Frankfurt.

LME nickel inventories MNISTX-TOTAL rose to a new record of 444,936 tonnes, denting the hopes of those bulls who expected shortages to develop after Indonesia banned unprocessed ore exports last year.

“Nickel has a capability of dropping initially down to $12,900,” said a trader.

All six industrial metals traded on the LME were weaker, giving up more gains after a rally that saw them collectively rise 13 percent during the seven weeks up to May 5.

“The base metals market was prone to a correction because the latest move up was based on speculators and went beyond the fundamentals. I think we’ll see prices move even lower in the short term,” Briesemann said, adding that nickel is likely to dip below $13,000.

A buoyant dollar also weighed on the market, making commodities priced in it more expensive for buyers using other currencies.

The euro dived against the dollar after European Central Bank officials said the bank could take further action to quash euro zone bond yields and after stronger-than-expected U.S. housing data.

Copper closed down 2.5 percent at $6,220, its lowest in almost three weeks and the steepest daily drop since January.

Three-month aluminium finished down 1.7 percent at $1,790, its lowest in more than three weeks. It has come under pressure from abundant supplies.

Zinc lost 2.3 percent to end at $2,228 while lead fell 1.5 percent to $1,937, the weakest since April 9.

Bucking the weaker trend, tin closed up 0.8 percent at $16,000 after Indonesia, the world’s top producer of refined tin, announced tighter export rules.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin (Editing by Ahmed Aboulenein and Ruth Pitchford)

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