Nickel Paces Metal Advances on Signs of Chinese Demand Growth

  • Nickel climbs as much as 3.4% on LME, most in almost two weeks
  • Copper rebounds after its biggest weekly drop since August

Nickel led an advance in industrial metals on signs of manufacturing growth in China, the world’s biggest consumer.

Caixin Media and Markit Economics said on the weekend that Chinese manufacturing expanded last month. The Caixin China Composite PMI Output index came in higher than 50 for a seventh straight month, signaling growth. The Bloomberg Dollar Spot Index was little changed after falling on Friday, when the U.S. Labor Department reported a lower-than-expected payrolls figure for September. A weaker dollar makes materials priced in greenbacks more appealing for buyers using other currencies.

There is “steady if unspectacular price action in the metals as China returns with somewhat better data,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail. “However, the investment magnetism of metals will only intensify with growth, regardless of who and how.”

Nickel for delivery in three months rose 3.1 percent to settle at $10,520 a metric ton at 5:50 p.m. on the London Metal Exchange. The metal used to make stainless steel has advanced 19 percent this year amid concerns about supply disruptions after the Philippines, the world’s biggest shipper of nickel ore, clamped down on errant miners. 

Last Week

Prices still fell 3.5 percent last week amid reports the Philippines would ease the clampdown and on speculation Indonesia may allow exports of low-grade material.

"It is not all about supply," Caroline Bain, an analyst at Capital Economics Ltd. in London, said in an e-mailed report. "Demand has also surprised on the upside this year, with China’s stainless steel output rising relatively strongly and by more than total steel output."

In other metals news:

  • All six main metals on the LME rose on Monday as markets in China reopened following a week-long holiday. Lead gained 1.1 percent and copper increased 1.5 percent, rebounding from the biggest weekly drop since August.
  • The Bloomberg World Mining Index rose 0.9 percent, headed for the biggest gain in more than a week.
  • Copper for December delivery rose 1.4 percent on the Comex in New York.
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