By James Regan
SYDNEY, Oct 27 (Reuters) - Chinese nickel futures dropped on Friday in step with steel prices, reversing earlier gains and on track to end the week sharply lower.
China is stepping up efforts to cut industrial production to combat smog, hitting demand for nickel, which is used to make stainless steel.
China’s government said on Friday that it had met its target for cutting steel capacity this year, with further curbs expected this winter when smog is typically heaviest. The country is the world’s biggest consumer of nickel.
* SHFE NICKEL: The most-traded nickel contract on the Shanghai Futures Exchange had dropped 2.6 percent to 9,160 yuan ($1,377.34) a tonne by 0555 GMT. The contract was 2 percent lower on the week.
* LME NICKEL: Three-month London Metal Exchange nickel was down 1.5 percent at $11,565 a tonne.
* STEEL DOWN: The most active rebar contract on the Shanghai Futures Exchange was off 2 percent, down for a second straight session.
* LME COPPER: Three-month LME copper backtracked 1.3 percent to $6,898 a tonne, extending losses from the previous session.
* SHANGHAI COPPER: The most-traded ShFE copper contract was off 1.5 percent.
* LME ALUMINIUM: Three-month LME aluminium slipped 0.5 percent after hitting a five-year-plus peak overnight as metal capacity cuts at Chinese smelters during the winter draws closer. Signs of a supply shortfall as LME inventories in London fell to a nine-year low also lent support.
* SHANGHAI ALUMINIUM: ShFE aluminium was down 0.82 percent, mostly holding gains from the previous session that saw the contract hit its highest in more than a week.
“Support remained for aluminium as investors expect to see further tightness as Chinese producers cut production heading into winter,” ANZ Bank said.
* INVENTORIES: Total stocks of aluminium in LME-registered warehouses fell 3,975 tonnes to 1.2 million tonnes, the lowest since September 2008 MALSTX-TOTAL. But Shanghai stocks have been steadily rising to an all-time high of 615,370 tonnes as of Oct. 20. AL-STX-SGH
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
ARBS ($1 = 6.6505 Chinese yuan renminbi)
Reporting by James Regan; Editing by Subhranshu Sahu and Joseph Radford