Nickel prices hit a one-month high on Friday on concerns China might order further output cuts in the sector as it ramps up efforts to clean its skies, while aluminum rose on news a Chinese city had ordered capacity reductions.
The city of Binzhou, home to top global aluminum maker China Hongqiao Group, has ordered 2.57 million tonnes of annual smelting capacity to be closed this winter.
China’s Communist Party Congress takes place next week and markets are growing concerned that Beijing will broaden efforts to eliminate more polluting mines and metal plants, especially during the winter months.
“The China environmental cuts are definitely having an impact. The concern is it could spread across the industry. On the nickel side there’s been reports we may see capacity cuts in nickel pig iron in China,” said Warren Patterson, commodities strategist at ING.
“The global economy is ticking along, China’s come back from holidays a bit more bullish, every data point we see out of China, out of the U.S., out of Europe, looks fairly positive.”
China’s import and export growth accelerated in September, data showed, suggesting the economy is still expanding at a healthy pace despite widespread forecasts of an eventual slowdown.
* NICKEL PRICE: Three-month nickel on the London Metal Exchange traded up 2.3 percent at $11,660 in official midday rings, having hit a one-month high of $11,680.
* OTHER METAL PRICES: Aluminium traded up 0.6 percent at $2,160 a tonne in rings, copper traded flat at $6,886.50, having hit a one-month high of $6,910, while zinc was last bid down 0.2 percent at $3,245, having hit its highest in more than 10 years last week at $3,308.75.
* CHINA COMMODITY IMPORTS: China’s factories splurged on imported commodities last month amid rising costs and tighter raw material supplies driven by Beijing’s anti-pollution campaign. But the strength is unlikely to be sustained as many companies curb production during winter.
* CHINA COPPER IMPORTS: China’s unwrought copper imports climbed 26.5 percent in September from a year earlier to 430,000 tonnes, hitting their highest monthly level this year. .
* CHINA ALUMINIUM EXPORTS: China exported 370,000 tonnes of unwrought aluminum and aluminum products in September, down 10 percent from August. Exports were at their lowest since February.
* ZINC SPREAD: Indicating tight nearby supply, cash zinc traded at a premium of $91 a tonne to the three-month price, its highest level on Reuters data going back to June 2009.
* ZINC STOCKS: LME data showed on-warrant or available zinc stocks 11,075 tonnes lower at 122,425, down some 60 percent this year.
* LEAD, TIN PRICES: Tin traded down 0.2 percent in rings at $20,700 while lead traded down 0.2 percent at $2,550.