SINGAPORE: London copper rebounded from two days of declines on Friday on a weaker US dollar, while nickel contracts in both London and Shanghai fell despite analyst warnings of supply shortages.
The dollar fell against a basket of major currencies on Friday, making it cheaper for buyers using other currencies to purchase greenback-denominated metals.
Three-month copper on the London Metal Exchange rose 0.4 percent to $6,433.50 a tonne at 0321 GMT, while the most active Shanghai copper contract fell 0.3 percent to 49,230 yuan ($7,327.75) a tonne.
London nickel fell 0.5 percent, after declining 1.9 percent in the previous session in its biggest drop in four weeks. The contract has been the best performer among base metals on the LME, supported by low inventory.
Shanghai nickel dropped 2.2 percent.
Analysts said on Thursday the global nickel market will face grave supply shortages unless key Chinese-led projects in Indonesia come online in a timely manner.
"Fundamentals continue to support nickel prices in view of the rebound of Chinese stainless steel production in March, low SHFE inventory and inherent supply deficits of nickel sulphates due to low production," said analyst Helen Lau of Argonaut Securities in a note on Friday.
FUNDAMENTALS
NICKEL STOCKPILES: LME nickel inventory <MNISTX-TOTAL> continued to hover around its lowest level since 2013, while on-warrant nickel inventory in warehouses tracked by ShFE <SNI-TOTAL-D> stayed around its lowest since 2015.
BYD: Chinese electric car and battery maker BYD Co Ltd , worried about nickel supply, said it welcomed joint ventures to secure supply of the metal used to make batteries for electric vehicles.
CHINA DATA: Markets are eyeing trade data from China, due for release later on Friday, for clues on whether the world's second biggest economy is rebounding.
PRICES: Other London metals edged up slightly after falling in early trade, while most Shanghai metals fell, amid worries on a slowing global economic growth.
UPSIDE: "We believe (base metal) prices will witness limited upside in the coming weeks, unless a US-China trade deal is finally struck, as concerns over global growth continue," said Fitch Solutions in a note Friday. "Nevertheless non-ferrous metal prices remain elevated in the year-to-date and we expect them to head higher from spot as we move into H219 on the back of robust demand from China," it said.
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