BEIJING: Copper prices fell on Friday as China and US economic data fanned demand concerns, while Shanghai nickel jumped after global commodity trader Trafigura uncovered an up to $577 million loss on an alleged nickel fraud.
Three-month copper on the London Metal Exchange was down 0.6% at $8,931 a tonne by 0348 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange slipped 0.3% to 68,270 yuan ($10,043.69) a tonne.
China’s January factory gate prices fell more than expected, suggesting that flashes of domestic demand that had stoked consumer prices after the zero-COVID policy ended were not strong enough to rekindle upstream sectors.
Meanwhile, a report on Thursday showed the number of Americans claiming unemployment benefits increased more than expected last week, reigniting recession fears.
On the supply side, China’s MMG Ltd said its Las Bambas copper mine in Peru was able to secure critical supplies, enabling it to continue production at a reduced rate after road blockades prevented arrival of key raw materials.
SHFE nickel advanced 3.5% to 217,700 yuan, after LME nickel jumped 6.4% in the previous session. Trafigura said on Thursday it booked a $577 million charge in the first half, after discovering that some nickel cargoes it received did not contain the metal in a case of “systematic fraud”.
“The (Shanghai nickel) contract with low stocks and liquidity was boosted by the news of the alleged fraud,” a Beijing-based analyst said. In the physical market, demand is constrained by high inventories of stainless steel, the main consumer of nickel.
But a recovery is likely as stainless steel producers have increased planned production in the wake of better demand from end users including new energy vehicles, according to Guangda Futures.
LME aluminium lost 0.8% to $2,478.50 a tonne, tin shed 1.8% to $27,245, zinc was down 0.3% to $3,115, and lead slipped 0.3% to $2,119.50.
SHFE aluminium fell 2% to 18,575 yuan a tonne, zinc eased 1% to 23,090 yuan, tin decreased 1.3% to 216,060 yuan, while lead gained 0.8% to 15,365 yuan.
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