LONDON: Nickel prices fell 3 percent on Monday, under pressure from weakening demand for stainless steel in top metals consumer China, rising Chinese borrowing costs and Beijing's regulatory crackdown on risky financing.
Chinese stocks fell sharply amid worries that rising borrowing costs will hit company profits and that fresh moves to reduce risks in the asset management industry could bring a sea change for banks and millions of small investors.
"Some reports coming out from China (indicate) stainless orders are weakening. Over the past couple of weeks, questions from clients have gone from what are the benefits of electric vehicles (for nickel) to how bad is China's demand," said Colin Hamilton, head of commodities research at BMO Capital Markets.
"China produced so much stainless in the third quarter they're having to cut back. I'd expect stainless production to be down relatively strongly in the fourth quarter," he added. Stainless steel accounts for some two-thirds of nickel demand.
NICKEL PRICES: London Metal Exchange nickel was last bid down 3.2 percent in official midday rings at $11,650 a tonne, having touched a one-week low of $11,610.
CHINA DEBT: Beijing will check local governments' investment in railway projects, the state planner said on Friday, amid official concerns that breakneck infrastructure spending is racking up too much debt.
CHINA INDUSTRY: China's industrial firms weathered a broad government crackdown on financial risks as profits continued to surge last month in a stabilising force for the world's second-biggest economy, which has started to cool slightly.
ZINC PRICES: Zinc was last bid down 1.5 percent in rings at $3,186, having touched a one week low of $3,169.50.
"On average, China has imported a good 45,000 tons of refined zinc and over 200,000 tons of zinc concentrate per month so far this year. This points to ample availability on the world market and in our opinion does not justify concerns about tight supply," Commerzbank said in a note.
COPPER PRICES: Copper hit $7,024 a tonne, its highest in a month, before reversing to trade down 1.1 percent at $6,919.
FREEPORT: Indonesia's Ministry of State-Owned Enterprises, tipped to oversee an acquisition of a majority stake in the local unit of Freeport-McMoRan Inc, has "no clear structure" yet for the deal.
CHILE STRIKE: Unionized workers at BHP Billiton Escondida copper mine in Chile, the world's largest, ended a 24-hour strike on Friday but could put down their tools again this week over the company's planned layoffs.
OTHER METALS: Aluminium was last bid down 0.4 percent at $2,123, lead traded down 0.6 percent at $2,465 while tin traded down 0.2 percent at $19,470.
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