Nickel prices in London fell for the first time in two weeks, snapping the longest rally since 2010, as industrial metals slumped amid concern that the economy will falter in China, the world’s biggest consumer.
A report due tomorrow probably will show China’s gross domestic product expanded 1.5 percent in the first quarter, down from 1.8 percent in the fourth quarter, according to a Bloomberg News survey. Copper fell as much as 2.5 percent to below $3 a pound in New York, and aluminum dropped the most in more than a month in London.
“The weakness we are seeing in base metals suggests that investors are selling ahead of what they expect to be some dreary data,” Edward Meir, an analyst at INTL FCStone in New York, said in a report. The reports on China’s GDP, fixed asset investment spending, industrial production and retail sales due tomorrow “will likely move markets in more definitive fashion for the balance of the week,” he said.
Nickel for delivery in three months dropped 0.7 percent to settle at $17,660 a metric ton at 5:50 p.m. on the London Metal Exchange, the first drop since March 27. Yesterday, the metal reached a 13-month high while climbing for the 11th straight session, the longest rally since October 2010.
In China, the broadest measure of new credit declined 19 percent from a year earlier, and money supply grew at the slowest pace on record, data showed today.
Nickel’s 14-day relative strength index, indicating whether a commodity is overbought or oversold, reached 83.5 yesterday, the highest since April 2006, before declining to 79.3 today. Levels above 70 signal prices may drop, according to some investors and analysts who study charts.
Earlier, the price dropped as much as 3.7 percent. Nickel surged 27 percent this year, the most among the six main metals in London.
Copper futures for July delivery fell 1.8 percent to $2.983 a pound on the Comex, the biggest loss since for a most-active contract since March 20. The price has dropped 12 percent this year.
On the LME, copper fell 1.9 percent to $6,541 a ton ($2.97 a pound).
Aluminum dropped 1.6 percent to $1,852 a ton, the biggest loss since March 7. Lead, tin and zinc declined.