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Nov. 6 (Bloomberg) -- Nickel dropped to a two-week low in London as record inventories are fueling concern that ample supplies will overwhelm demand for the metal, used to make stainless steel. Copper also slid.
Stockpiles tracked by the London Metal Exchange, which have surged 71 percent this year, reached an all-time high of 239,958 metric tons yesterday. Supply will exceed demand this year by 120,000 tons, up from a 92,000-ton surplus in 2012, according to Barclays Plc.
“Inventories of nickel just keep going up,” Jason Schenker, the president of Prestige Economics LLC, an Austin, Texas-based consultant, said in a telephone interview. “You’ve got a growing glut of cheap supply hitting the market, and that’s going to weigh on prices.”
Nickel for delivery in three months declined 1.6 percent to settle at $14,110 a ton at 5:51 p.m. local time on the LME. Prices touched $14,059, the lowest since Oct. 18.
The rise in inventories is helping keep traders with bets on lower prices from buying to close out those positions, making a so-called short-covering rally less likely, Standard Bank Plc said in a report yesterday.
Nickel settled below its 30-day moving average, at $14,177.33 today, for the first time since Oct. 10.
Copper for delivery in three months lost 0.6 percent to $7,115 a ton ($3.23 a pound) in London. Aluminum and lead advanced, while tin and zinc fell.
In New York, copper futures for delivery in December declined 0.7 percent to close at $3.237 a pound on the Comex.
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