Metals Retreat as Nickel Suffers Worst Two-Day Drop Since May

  • China’s credit, factory and investment data misses estimates
  • Teck Resources leading declines by metal-producer stocks

Nickel led a slump in industrial metals, dragging down mining stocks, after several economic reports on China revived demand concerns in the world’s top user of raw materials.

China’s economic stabilization faltered in July as factory output, retail sales and investment all slowed. The country’s broadest measure of new credit and another key gauge of lending increased at the slowest pace in two years. In the U.S., retail sales stalled in July, while wholesale prices unexpectedly fell.

Nickel for delivery in three months dropped 4 percent to settle at $10,305 a ton at 5:51 p.m. in London. The metal slipped 5.1 percent in the past two days, the most since May. Copper, zinc and tin also fell on the LME, while aluminum and lead gained. Teck Resources Ltd. slumped as much as 7.1 percent, pacing declines by metal-producer stocks.

“Disappointing economic data from China is keeping base metal prices in check at the end of the week, with all of them losing ground moderately,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in an e-mailed note. “Economic prospects in China remain subdued, and this could also have a negative impact on demand for metals.”

In China, industrial production rose 6 percent from a year earlier in July, retail sales climbed 10.2 percent last month, and fixed-asset investment increased 8.1 percent in the first seven months of the year. All three readings missed economists estimates.

In the U.S., the producer-price index fell 0.4 percent in July, a sign inflation is likely to stay muted. Separately, a Commerce Department report showed improving car sales drained enough cash from consumers’ accounts to cause demand at eight of 12 other major retail categories to fall last month.

In other metal news:

  • A gauge of 18 large industrial metal producers tracked by Bloomberg Intelligence fell 1.7 percent. Antofagasta Plc and Rio Tinto Plc were among the worst performers.
  • Steelmakers also slumped, led by U.S. Steel Corp. and AK Steel Holding Corp.
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