November 23, 2018 / 11:00 AM / 25 days ago

METALS-Nickel tumbles to 13-month low on demand fears

(Updates with closing prices)

By Peter Hobson and Mai Nguyen

LONDON, Nov 23 (Reuters) - Nickel prices on Friday touched their lowest since October last year, pulled down by worries about a supply surplus in 2019 and weaker demand from China, the largest consumer of the metal.

Most other base metal prices also fell sharply on concerns that U.S.-China trade talks next week could fail, leading to weaker economic growth.

Adding to the bearish mood for nickel was news that German chemicals giant BASF plans to use less of the metal in its electric car batteries. Electric vehicles have been touted as a major new source of demand.

Benchmark nickel on the London Metal Exchange closed down 0.5 percent at $10,915 a tonne after touching a 13-month low of $10,735. It fell 3.9 percent this week.

The most active nickel contract on the Shanghai Futures Exchange settled 2.2 percent lower on Friday and down 5.8 percent this week.

“I heard some Chinese investors are shooting (down) the nickel price. They think nickel production in Indonesia will bring the market into surplus next year, and demand for stainless will be bad,” CRU analyst Peter Peng said, adding that they expected the nickel price to fall to about $8,000.

NICKEL SUPPLY: Expectations of a supply avalanche hitting the nickel market next year due to new capacity in Indonesia have sent prices down more than 15 percent since September.

CHINA TRADE: U.S. President Donald Trump and his Chinese counterpart Xi Jinping are expected to hold talks during the G20 summit next week.

CHINA STOCKS/YUAN: Shanghai equities fell by the most in five weeks on Friday and the yuan weakened, making dollar-priced metals more expensive for Chinese buyers.

BASF BATTERIES: Germany’s BASF has a new recipe for electric car batteries which cuts the nickel content by more than half and uses more manganese.

CHINA SCRAP IMPORTS: China’s October scrap metal imports fell to their lowest since at least 2014 amid tightening regulations on waste imports.

Arrivals of scrap copper last month fell to 170,000 tonnes from 200,000 tonnes in September and scrap aluminium imports fell to 90,000 tonnes from 100,000 tonnes.

CHINA ALUMINA: China’s exports of aluminium raw ingredient alumina meanwhile soared in October to their highest since at least 2014 at 460,072 tonnes.

TIN SURPLUS: The global tin market is expected to move into a surplus of 500 tonnes next year from a 7,500-tonne deficit in 2018, the International Tin Association said on Friday.

PRICES: LME copper ended down 0.8 percent at $6,207 a tonne, aluminium finished up 0.1 percent at $1,949, zinc fell 2.4 percent to $2,519, lead slipped 1.3 percent to $1,968 and tin closed 2.3 percent lower at $18,800.

Reporting by Peter Hobson and Mai Nguyen Editing by Jan Harvey and Louise Heavens

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