April 16, 2019 / 8:07 AM / 4 days ago

METALS-Nickel gains on China's home prices data, stocks rally

(Recasts, updates prices, adds Chinese home prices data throughout)

By Mai Nguyen

SINGAPORE, April 16 (Reuters) - Nickel prices rose on Tuesday, as a faster rise in housing prices added to hopes that China’s stimulus policies are translating into stronger growth.

Benchmark nickel rose 1 percent to $13,125 a tonne and the most active nickel futures contract on the Shanghai Futures Exchange (ShFE) closed up 1.1 percent to 102,270 yuan ($15,251.43) a tonne.

The gains corresponded with a jump in Chinese shares, which hit a 13-month closing high after China data showed new home prices grew slightly faster in March after growth slowed the previous month, putting a floor under the cooling market.

“The macro environment... is becoming optimistic,” said an analyst based in Guangzhou, who spoke on condition of anonymity due to company policy.

London copper also rose 0.4 percent after a dull trading session in early Asian hours as investors eyed a set of Chinese data due to be released on Wednesday, including the China’s economic growth in the first quarter of 2019.

“China had this massive credit expansion for March and if the March data still shows a lack of growth or a very weak (economy) then people will start to question about the effective need of the credit expansion,” said analyst Helen Lau of Argonaut Securities.

FUNDAMENTALS

* COPPER: Funds have this year played copper from the short side and from the long side but with little success either way, partly a reflection of copper’s lack of directional impetus in recent weeks, said Reuters columnist Andy Home.

* ZINC PRICES: London zinc dropped 1.2 percent, on track for a second straight fall, while the most-active zinc contract in Shanghai Futures Exchange (ShFE) fell 1.7 percent.

* ZINC INVENTORIES: Zinc inventories in LME-approved warehouse as of Friday shot up 7.5 percent from a day earlier to near a three-week high of 56,125 tonnes, latest data showed. MZNSTX-TOTAL

On-warrant zinc stocks in warehouses tracked by ShFE also marked a 7-percent daily increase on Monday to 51,976 tonnes. WSZN-TOTAL-D

“Zinc came under pressure after inventories on the LME rose sharply. The 7.5 percent increase was the biggest gain in almost a year,” ANZ said in a note.

* ERAMET: French mining company Eramet said its loss-making SLN nickel division had received a boost from the New Caledonia government, which authorised SLN to export 4 million tonnes of nickel ore annually for 10 years.

* RUSAL: Rusal, the world’s largest aluminium producer outside China, is making its first investment in the United States since Washington lifted sanctions against the Russian aluminium giant, teaming up with U.S. manufacturer Braidy Industries to build a mill in Kentucky.

* TRADE: United States Treasury Secretary Steve Mnuchin told Fox Business Network on Monday that trade negotiations between Washington and their Chinese counterparts were “making a lot of progress.”

Investors will shift more attention towards the progress of the trade talks should the Chinese economic data disappoint, Argonaut’s Lau said.

* For the top stories in metals and other news, click or

PRICES

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 = 6.7056 Chinese yuan renminbi)

Reporting by Mai Nguyen; Editing by Shreejay Sinha and Rashmi Aich

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