Nickel Extends Gains Before U.S. Data as China Shows Expansion

Nickel surged for a second day before factory orders data from the U.S. and after manufacturing expanded more than expected in China, the largest user.

Nickel rose as much as 2.7 percent after gaining 2.5 percent Wednesday, heading for the biggest two-day advance since March 20. U.S. factory orders shrank 0.4 percent in February after contracting 0.2 percent the previous month, according to a Bloomberg survey before the results Thursday. China’s official Purchasing Managers’ Index in March signaled expansion and exceeded estimates, data showed Wednesday. The Comex and London Metal Exchange will be closed Friday for a holiday in the U.S. and U.K.

Upward momentum is coming from investors covering their bets that prices will fall after the better-than-expected PMI data from China, said Hwang Il Doo, a senior metals trader at Korea Exchange Bank Futures Co. in Seoul. “Investors are looking to liquidate their positions before the LME closes for the holiday.”

Money managers cut net-long positions for nickel on the LME to 10,407 contracts in the week ending March 27 from 17,973 a week earlier, according to the exchange’s most recent commitment of traders report released Tuesday.

Nickel for delivery in three months on the LME climbed 1.4 percent to $12,885 a metric ton at 4:15 p.m. in Hong Kong, paring a second weekly decline. The contract in Shanghai for July delivery rose 4 percent to close at 96,160 yuan ($15,517) a ton.

Copper in London was little changed at $6,037.50 a ton ($2.74 a pound). In New York, May futures were little changed at $2.7465 a pound, while the contract in Shanghai for June delivery rose 0.6 percent to close at 43,520 yuan a ton.

On the LME, aluminum and tin rose, while zinc and lead were little changed.

(An earlier version of this story corrected date of LME data in fourth paragraph.)

Before it's here, it's on the Bloomberg Terminal.