Nickel slumped the most in a week amid speculation that the financial crisis in Europe will further depress metals demand in the region and as political tension increased in Egypt.
Two Portuguese ministers resigned from the government in a dispute with Prime Minister Pedro Passos Coelho over fiscal policies, while borrowing costs increased in Spain and Italy. Crude oil surged on concern that rallies in Egypt by demonstrators protesting the rule of President Mohamed Mursi may disrupt Middle Eastern supply. Nickel stockpiles monitored by the London Metal Exchange rose 1 percent to a record 190,590 metric tons, data from the bourse showed today.
“Worries about Europe and rising oil prices are not so great for the metals market,” Tom Power, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “The fundamentals for the nickel market remain weak.”
Nickel for delivery in three months slumped 1.3 percent to settle at $13,855 a ton at 5:50 p.m. on the LME, the biggest drop since June 26. Prices are down 19 percent this year, after touching a four-year low of $13,525 on June 25.
Aluminum, tin, lead and zinc also fell in London, while copper rose.
China’s State Reserve Bureau was buying aluminum, Goldman Sachs Group Inc. said in a report yesterday. Speculation that the stockpiling agency was purchasing copper supported the market, according to James Marks, a co-head of global metals at Xconnect Trading Ltd., a London-based interdealer broker.
On the Comex in New York, copper futures for September delivery climbed 1 percent to $3.1745 a pound. Floor trading at the exchange will be closed tomorrow for the Independence Day holiday.