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LME nickel at year high, zinc dips

LONDON: London Metal Exchange (LME) nickel starred in Monday's trade, peaking at $9,220 a tonne before settling at $9,210 at the close, $150 up on Friday's PM kerb finish.

Meanwhile zinc scrabbled to stay above key support at $1,100, closing at $1,107, $5.00 below the previous close.

"Zinc looks bad on the charts and could go lower," Robin Bhar, analyst at Brandeis (Brokers) Ltd, said.

"If it holds above $1,100 it should be alright, but if it slips below it could trigger technical selling," Bhar said.

Nickel's rise in thin volumes is still being driven by strong stainless steel demand and supply tightness, traders said.

"It is a very brave man who tries to call an upside on this," one trader said, adding that there was now market speculation that nickel could even go as high as $12,000.

"The charts suggest nickel has got ahead of itself," Brandeis' Bhar said.

"But the fundamentals are very strong, and I wouldn't want to be short of nickel or aluminium with the backwardation involved," he added.

The backwardation in cash/three months nickel remained clearly evident at $5/$10, but was narrower than on Friday.

Aluminium ended at $1,681, down $10 from Friday's finish, and cash/threes was in a backwardation of $22/$26 shortly after the close.

Dealers reported some technical and fund selling in a quiet market and a 5,250-tonne increase in LME warehouse stocks did little to help sentiment.

Copper traded sideways, holding well above support at $1,800 and closing at $1,823, $5 up on Friday's close.

Copper must consolidate before testing resistance at $1,855, a dealer said.

Tin dipped below $5,700, falling $40 from the previous close to end at $5,690, after dipping as low as $5,665 in the PM rings.

Lead showed little movement, creeping $1 higher to $469 and aluminium alloy was last indicated at $1,390/$1,393, down $1.

Silver ended the day indicated at 542/547 cents an ounce, up 17 cents.-Reuters