June 13, 2017 / 10:40 AM / 2 years ago

METALS-Nickel hits year low, zinc slumps as steel prices fall

* LME/ShFE arb: tmsnrt.rs/2oQ5nm2

* Nickel slides to lowest since June 2016

* Chinese bonded zinc premiums surge

* China rebar futures slide 3 pct (Updates with closing prices)

By Eric Onstad

LONDON, June 13 (Reuters) - Nickel prices touched the lowest in a year on Tuesday and zinc also slid, pressured by a fall in Chinese steel prices and ahead of expected weaker Chinese data.

“We expect the May China data to extend the downturn that began in April and would have negative implications for metals,” said Caroline Bain, chief commodities economist at Capital Economics in London.

“We haven’t seen any signs from the (Chinese) authorities that they’re looking to stimulate the economy. They’re trying to rein in credit growth, they’re trying to curb excessive behaviour in the property market, which is very bad news for metals.”

The data on Chinese retail sales, industrial growth and urban investment is due on Wednesday and consensus forecasts are weaker for all three.

The U.S. Federal Reserve is widely expected to raise its benchmark interest rate in a decision scheduled for Wednesday, but this is largely priced into the market, Bain added.

* LME ZINC: London Metal Exchange zinc closed down 0.9 percent at $2,473 a tonne, extending a drop of 1.5 percent in the previous session.

* ZINC: Premiums for zinc held in China’s bonded zones have surged to $195-$205 from $155 last week ZN-BMPBW-SHMET.

* ZINC: Industry sources said that shorts on the front month ShFE were being forced to cover their positions. Since ShFE accepts mostly Chinese brands for delivery against its front month futures contract, the spillover effect into LME may be limited, they said.

* CHINESE STEEL: Zinc, mainly used for galvanising steel, and nickel, largely used to make stainless steel, were pressured after China’s rebar futures fell more than 3 percent on Tuesday in their sharpest single-day drop since early May. Investors worried that a slowing property market may dent steel demand in the world’s top consumer.

* NICKEL: LME nickel fell more than 1 percent to $8,680, the lowest since June 2016, before rebounding to finish at $8,800, up 0.1 percent.

“Failure at the $8,700 current June low on a daily chart closing basis would put the December 2008 low at $8,500 back on the map,” Commerzbank technical analyst Axel Rudolph said in a note.

* ALUMINIUM: LME aluminium closed unchanged at $1,889 after touching an intraday low of $1,879. Alastair Munro at broker Marex Spectron said after breaching last week’s low of $1,887, the next support level was $1,862.50, the low from May 12.

“Marex data analysis shows yesterday’s supply was the heaviest since the May 8 which was on that move down to that low,” he said in a note.

* PRICES: Copper ended down 1 percent at $5,717, lead closed up 0.2 percent at $2,060 and tin climbed 1.8 percent to $19,400.

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Additional reporting by Melanie Burton in Melbourne; Editing by Mark Potter, Greg Mahlich and Alexander Smith

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