* Nickel could see more falls in shot-term - analysts
* Shanghai copper premiums steady
* Chinese economy concerns continue to weigh on metals
(Updates with closing prices)
By Eric Onstad and Harpreet Bhal
LONDON, June 12 Nickel sank to its lowest price
in about two months on Thursday on persistent profit-taking
after months of rallying on an Indonesian ban on ore exports in
Copper fell to its lowest in 1-1/2 months on caution over a
Chinese investigation into metals financing that could impact
metals trade and release metal onto the market.
Three-month nickel on the London Metal Exchange
(LME) hit a session low of $17,700 a tonne, the weakest since
April 16, before paring losses to close at $18,000 a tonne, down
Nickel, up 30 percent so far in 2014, has been by far the
best performing base metal after top producer Indonesia imposed
a ban on shipments of unprocessed ore in January. It hit a
27-month peak of $21,625 a tonne on May 13.
Deutsche Bank analyst Grant Sporre expects further weakness
in nickel since stocks of ore and refined metal have not been
eroded as much as has been discounted in the price.
"The nickel price had run ahead of fundamentals ... For the
very near term, the next month or so, we've still got some
downside risk, we could drift towards $17,000," he said.
"But as we look to Q4, the market will tighten up again and
the real fundamentals come to the fore, so we could head back
Analysts at Commerzbank also expect more falls for nickel in
the near term.
"Short-term-oriented financial investors have been taking
profits for a number of weeks now. This is clear from the open
interest which from its record high in May has now decreased by
8.5 percent to 228,000 contracts," the bank said.
"In our opinion, the current momentum suggests that the
correction will continue in the short term."
News this week that authorities are investigating the use of
cargoes of metal as collateral in financing deals has upended
The investigation has prompted some banks to wind up deals
or stop doing them altogether, while others are telling their
customers to shift metal into safer warehouses as a fraud
investigation in a China port rumbles on.
Three-month LME copper fell to its lowest level
since May 1 at $6,614.75 a tonne, before paring losses to close
a $6,620 a tonne, down 1.1 percent.
However, the premium of cash copper over three month copper
CMCU0-3 rebounded to $46.75 a tonne, from a low of $8 on
Friday, as anxiety eased somewhat that the investigation would
lead to the financing deals unravelling and flood metal onto the
"I suspect the bounce back up is a reflection that there is
physical tightness and there has been no visible physical sign
of metal coming to the fore," Sporre said.
In another sign that the worst of the scare might be over
for now, premiums for bonded copper in Shanghai steadied at
$70-$90 from the day before, after sliding over the past week
according to China price provider Shmet. (www.shmet.com/)
Metals markets have also been weighed down by concerns about
the Chinese economy, which got off to a soft start to the year,
growing at its slowest pace in 18 months in the first quarter.
Lead closed 2.4 percent lower at $2,075, its lowest
since early May, while tin ended down 1.1 percent at
$22,575, having earlier hit a low of $22,550 - a level last
reached on March 13.
Aluminium ended at $1,845, down 1.1 percent and zinc
, untraded at the close, was last bid at $2,075 down 2
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
Three-month LME tin
(Additional reporting by Melanie Burton; Editing by Susan
Thomas and David Evans)