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LONDON: Prices of industrial metals fell on Monday due to profit-taking, nervousness ahead of a US Federal Reserve meeting this week and a firm dollar, but low stocks provided some support.

Benchmark nickel on the London Metal Exchange was down 6.8% at $22,385 a tonne at 1707 GMT.

Prices of the metal used to make stainless steel and chemicals for electric vehicle batteries touched $24,435 a tonne last week, the highest since August 2011.

“Broader risk-asset price weakness linked to Fed rate hike bets is weighing on base metals,” said Tom Mulqueen, an analyst at Amalgamated Metal Trading. “Metals, particularly nickel, have had a strong couple of weeks and are consolidating.”

FED: US central bankers have made clear they are likely to start raising interest rates as early as March to rein in high inflation.

This has boosted the US currency, which when it rises makes dollar-denominated metals more expensive for holders of other currencies, subduing demand.

UKRAINE: Weighing on sentiment were geopolitical tensions over Russia’s massing of troops near its border with Ukraine.

STOCKS: Nickel inventories in LME-registered warehouses have fallen 65% since April last year, while those of aluminium and copper have dropped 56% and 60%, respectively.

Zinc stocks have fallen 45% since April, while those for lead are down 57% since March.

Copper prices fell 2.7% to $9,677 a tonne, aluminium slipped 0.1% to $3,036, zinc lost 1.3% to $3,586 and lead ceded 1.3% to $2,341.

TIN: Delays in granting tin export permits in Indonesia, the world’s second-biggest producer of the metal, exacerbated shortages that pushed prices of the soldering metal to a record high of $44,180 a tonne last week.

It was down 3.5% at $42,425 a tonne on Monday.

CHINA: Monetary policy easing in the world’s top consumer of industrial metals helped support sentiment.

“We believe the major weakening (in industrial commodities demand) would come as a result of an inevitable property downturn and rolling COVID lockdowns in major Chinese cities,” Citi analysts said.

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