SYDNEY, Oct 27 (Reuters) – Chinese nickel futures dropped on Friday in step with steel prices, reversing earlier gains and on track to end the weak sharply lower.
China, the world’s biggest consumer of nickel that is used to make stainless steel, is stepping up efforts to cut industrial production to combat smog, which typically occurs during the winter months as industrial emissions mix with smoke from coal-fired heating units. Steel mills have been ordered to curb production between October and March.
FUNDAMENTALS
* SHFE NICKEL: The most-traded nickel contract on the Shanghai Futures Exchange dropped 1.4 percent to 94,280 yuan ($14,200.51) a tonne. The contract was 1.8 percent lower on the week.
* LME NICKEL: Three-month London Metal Exchange nickel was 0.1 percent down at $11,730 a tonne by 0100 GMT.
* STEEL DOWN: The most active rebar contract on the Shanghai Futures Exchange was off 0.48 percent, down for a second straight session.
* LME COPPER: Three-month LME copper backtracked 0.13 percent to $6,977 a tonne, extending losses from the previous session.
* SHANGHAI COPPER: The most-traded copper contract on the Shanghai Futures Exchange was off 0.18 percent.
* LME ALUMINIUM: Three-month LME aluminium steadied after hitting a five-year-plus peak overnight as metal capacity cuts at smelters during the winter drew closer. Signs of a supply shortfall as LME inventories in London fell to a nine-year low also lent support.
* SHANGHAI ALUMINIUM: ShFE aluminium was flat, holding gains from the previous session that saw the contract hit its highest in more than a week.
“Support remained for aluminium as investors expect to see further tightness as Chinese producers cut production heading into winter,” ANZ Bank said.
* CHINA CUTS: China, world’s biggest producer of aluminium, is expecting to cut millions of tonnes of aluminium capacity during the winter to combat air pollution.
* INVENTORIES: Total stocks of aluminium in LME-registered warehouses fell 3,975 tonnes to 1.2 million tonnes, the lowest since September 2008 <MALSTX-TOTAL>. But Shanghai stocks have been steadily rising to an all-time high of 615,370 tonnes as of Oct. 20. <AL-STX-SGH>
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MARKETS NEWS
* Asian shares gained on Friday as technology shares were boosted by upbeat earnings from U.S. hi-tech giants while the euro hovered near three-month low against the dollar after the European Central Bank extended its stimulus.
DATA/EVENT AHEAD (GMT) 0600 Germany GfK consumer sentiment Nov 0800 Euro zone Money supply and lending data Sep 1145 European Central Bank announces interest rate decision 1230 ECB President Mario Draghi holds news conference 1230 U.S. Weekly jobless claims 1400 U.S. Pending homes sales Sep
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 = 6.6392 Chinese yuan)
(Reporting by James Regan; Editing by Subhranshu Sahu)
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