January 16, 2018 / 11:47 AM / 2 years ago

METALS-Copper hits 3-1/2-week low, nickel slides more than 5 pct

* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl

* LME/ShFE arb: bit.ly/2wZSAEz (Adds closing prices)

By Maytaal Angel

LONDON, Jan 16 (Reuters) - Base metals slid on Tuesday with copper and nickel hitting multi-week lows as a steadier dollar weighed, profit-taking set in following strong gains late last year and worries lingered over fading demand in China before the Lunar New Year.

Three-month copper on the London Metal Exchange ended down 1.8 percent at $7,078 a tonne, having hit its weakest since Dec. 22 at $7,035.

Stainless steel ingredient nickel closed down 2.4 percent at $12,550, having slid more than 5 percent to its lowest since Dec. 29 at $12,190.

The dollar index was up 0.15 percent at 90.59, recovering from Monday’s three-year low. A stronger dollar makes dollar-priced metals costlier for non-U.S. investors.

“(We’re seeing) a bit of profit-taking on the back of a strong run (and) we had some trade data from China last week which indicated imports of refined metals have been somewhat slow,” said Nitesh Shah, commodity strategist at ETF Securities.

* IRON ORE: Iron ore futures in China ticked up on Tuesday after dropping 2 percent in the previous session, but record stockpiles of the steelmaking ingredient at the country’s ports kept a lid on price gains.

Broker Marex Spectron cited disappointing steel demand and more talk of a sell-off across ferrous metals as impacting nickel. It also noted broader risk-off sentiment in the wider metals markets in China, the world’s top industrial metals consumer.

“The Chinese are in wind down ahead of their new year. They have not been the drivers of the metal moves higher over the past few weeks, reflected in the declining onshore premiums,” it said in a note.

* COPPER, ALUMINIUM SUPPLY: Rio Tinto stuck to a 2018 production target of 510,000-610,000 tonnes of mined copper and 225,000-265,000 tonnes of refined copper. Aluminium production is targeted at 3.5-3.7 million tonnes. For 2017, aluminium production eased 1 percent and mined copper output fell 9 percent.

“ING estimates a (copper) concentrate deficit of 145,000 tonnes last year but a return to growth in mine supply should mean a more balanced 2018,” ING said in a note.

* COPPER, ZINC STOCKS: Headline LME copper inventories have climbed 12 percent since the start of December to 204,650 tonnes. Zinc ‘on-warrant’ or available inventories have slid 38 percent in two weeks to 112,850 tonnes. <0#LME-STOCKS>.

* OTHER METALS: Zinc ended down 0.5 percent at $3,404.50, having hit its highest in more than a decade on Monday. Lead closed down 1.3 percent at $2,554, aluminium ended down 1.7 percent at $2,189 while tin ended up 0.8 percent at $20,470.

Editing by Andrew Heavens, editing by David Evans

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