Nickel Has Biggest Two-Day Rally Since ’12 on China Relief Rally

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Nickel posted the biggest two-day rally since 2012, leading industrial metals higher, as the Chinese government stepped up measures to stem a rout in the country’s stock market.

On the London Metal Exchange, nickel for delivery in three months rose 4.9 percent to settle at $11,500 a metric ton at 5:50 p.m., the biggest increase since Oct. 28. In two days, the price jumped 8 percent, the most since Sept. 17, 2012. At the same time, a gauge of six LME had the largest gain in 15 weeks.

Shares in China advanced in volatile trading as the government battled to restore investor confidence in a market that’s lost $3.9 trillion in less than a month. Metals rebounded from multi-year lows as investors unwound bets on falling prices, according to Kingdom Futures Ltd., a West Malling, England-based brokerage.

“China’s governmental actions regarding its equities market went a long way to steady nerves elsewhere and encourage buyers,” RBC Capital Markets Ltd. said in a note. “However, metals have yet to establish solid support to enable the long overdue recovery.”

On Wednesday, nickel touched the lowest in six years. A 60-day measure of historical volatility on Thursday reached the highest since 2012. The metal, used in stainless steel, has slumped 24 percent this year.

Losing Money

Further price declines “could be limited as speculation of production cuts would increase,” Samuel Garson, partner at Sunrise Brokers LLP in London, said by telephone. As much as 65 percent of nickel producers are losing money at current prices, according to Standard Chartered Plc.

Copper on the LME advanced 2 percent to $5,630 a ton ($2.55 a pound). In two days, the price climbed 5.4 percent, the most since March 20. Aluminum, zinc, lead and tin rose on Thursday.

The LME gauge of six metals rose 2.2 percent to 2,575.9. In two days, the index advanced 4.9 percent, the most since March 20.

On Tuesday, aluminum and lead entered bear markets as the plunge in Chinese equities and a potential Greek exit from the euro zone spurred concerns on global economic growth.

On the Comex in New York, copper futures for September delivery rose 2.2 percent to $2.5515 a pound. The price has slumped 21 percent in the past 12 months.

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