July 2, 2019 / 4:31 AM / 2 months ago

METALS-Shanghai nickel slides as bull run fades; tin price tanks

 (Adds comment, updates prices)
    BEIJING, July 2 (Reuters) - Shanghai nickel prices slumped
nearly 4% on Tuesday, tracking a steep fall in London in the
previous session as investors chose to book profits after recent
gains, while China tin prices dropped to their lowest in almost
three years. 
    Nickel, which is used to make stainless steel and batteries
for electric vehicles (EVs), was the standout performer in the
base metals complex in the first half of 2019 with a gain of
more than 12% in London. But it is now on course to close lower
for a third straight session.
    "Whilst the EV story appears to be the theme dominating any
bullish news flows, elevated stainless stocks and increasing
nickel pig iron production mean some specs see (the) short-term
rally as overdone," broker Marex Spectron said in a note.
    
    FUNDAMENTALS
    * NICKEL: The most traded August nickel contract on
the Shanghai Futures Exchange slumped as much as 3.9% to 97,080
yuan ($14,144.59) a tonne, the lowest since June 13, and ended
the morning session at 97,150 yuan. Three-month nickel on the
London Metal Exchange was down 1.3% at $12,185 a tonne
as of 0355 GMT, after ending down 2.7% on Monday. 
    * TIGHTNESS: Nickel's momentum came from "flash", or sudden
tightness in SHFE and LME stocks, Citi said in a note. "Both are
technical and temporary in our view," it said, adding that: "We
do not believe the nickel rally has legs in the near term, based
on nickel's own fundamentals."
    * COPPER: Three-month LME copper drifted down 0.1%
to $5,947.50 a tonne, after ending 0.6% lower on Monday as
euphoria over a U.S.-China trade truce gave way to lingering
fears over demand. Shanghai copper slipped 1.2% to
46,690 yuan a tonne.
    * FREEPORT: Freeport-McMoRan Inc said it expected to
report a loss in the second quarter, hit by lower gold
production, weaker copper prices and higher costs, sending the
U.S. miner's shares down nearly 6%.
    * ALUMINIUM: Shanghai aluminium prices dipped 1.1%
to 13,630 yuan a tonne, the lowest since March 27, squeezing
smelter margins in China, the world's biggest aluminium
producer. They had hit as high as 14,380 yuan in May.
    * TIN: Shanghai tin fell 3.1% to 138,080 yuan a
tonne, its lowest since September 2016. "Domestic and foreign
tin stocks are high, but demand is relatively low," a
China-based tin trader said.
    * ENVIRONMENT: The LME must force its brands to disclose
their impact on the environment as part of the exchange's
efforts to clean up supply chains, a letter signed by 16 NGOs
said.
    * For the top stories in metals and other news, click       
 or     
        
    MARKETS NEWS    
    * Asian shares were choppy as weak global manufacturing
activity reinforced worries about slowing world growth.
    
        
    DATA AHEAD (GMT)
0430    Australia    RBA Cash Rate July
0600    UK        Nationwide House Price June
1200    Brazil        Industrial Output May        
        
    PRICES       
 BASE METALS PRICES                      0400 GMT
 Three month LME copper                      5947
 Most active ShFE copper                    46680
 Three month LME aluminium                   1797
 Most active ShFE aluminium                 13655
 Three month LME zinc                        2456
 Most active ShFE zinc                      19580
 Three month LME lead                      1914.5
 Most active ShFE lead                      16180
 Three month LME nickel                     12175
 Most active ShFE nickel                    97150
 Three month LME tin                        18730
 Most active ShFE tin                      138460
                                                 
 BASE METALS ARBITRAGE                           
 LME/SHFE COPPER             LMESHFCUc3    594.58
 LME/SHFE ALUMINIUM          LMESHFALc3    -175.3
                                         
 LME/SHFE ZINC               LMESHFZNc3    123.61
 LME/SHFE LEAD               LMESHFPBc3    873.25
 LME/SHFE NICKEL             LMESHFNIc3    787.24
                                         
 
($1 = 6.8634 Chinese yuan)

    
 (Reporting by Tom Daly; Editing by Subhranshu Sahu)
  
 
 
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