trashed and down 6pc overnight, page-3

On similar lines on Bloomberg too as follows:

http://www.bloomberg.com/apps/news?pid=20601012&sid=az0MnAkgbroU&refer=commodities


Nickel Falls to 10-Week Low After London Exchange Changes Rules

By Brett Foley

June 7 (Bloomberg) -- Nickel fell to a 10-week low, erasing its leading position this year on the London Metal Exchange, as stockpiles rose and the bourse imposed new rules to curb what one analyst described as ``collusive'' trading.

Two or more companies each holding 25 percent or more of LME-monitored nickel stockpiles now need to make more metal available to other buyers. Inventories tracked by the LME increased 2.4 percent to 8,604 tons, the highest since July 10.

``It's a clear signal that the LME plans to act against this type of collusive market behavior,'' said John Kemp, a London- based analyst at Sempra Metals Ltd., one of 11 companies trading on the floor of the LME. ``Stockpiles have been rising and there doesn't appear to be a shortage of physical metal.''

Nickel for delivery in three months on the LME declined $1,800, or 4 percent, to $43,700 a metric ton as of 12:45 p.m. in London. It earlier fell to $43,402, the lowest compared with intraday prices since March 29. Nickel has gained 34 percent this year, compared with 39 percent for lead. Nickel traded at a record $51,800 on May 9.

LME-monitored stockpiles have risen 29 percent this year. Prices probably will halve in the next several months as supply increases, Citigroup Inc. analysts Alan Heap and Alex Tonks said in a June 5 report.

Hedge funds are driving prices higher by speculating against metal producers that have sold forward their production in anticipation of lower prices, Citigroup said.

Nickel for immediate delivery is $1,350 a ton more expensive than the benchmark three-month contract, 52 percent below yesterday's rate. Such a decline in the so-called cash price indicates more availability of metal stored at LME-monitored warehouses.

Lending Fees

Lending fees for next-day delivery of the metal dropped 90 percent to $20 a ton, from yesterday's rate of $200.

The price of nickel may decline further if stainless steel producers use more alternative materials to cut costs, Sempra's Kemp said. Companies such as South Korea's Posco, Finland's Outokumpu Oyj and Germany's ThyssenKrupp AG are promoting nickel- free or lower-nickel forms of stainless steel, Kemp said.

Copper fell $45, or 0.6 percent, to $7,375 a ton.

Imports of copper into China, the world's biggest user, may have dropped 48 percent to 100,000 metric tons last month from April's near-record 192,069 tons, after stockpiles increased and prices soared, according to traders and analysts, including Xue Feng at Maike Futures Co. That would be the biggest monthly decline since imports fell 59 percent in May 2004.

LME-monitored stockpiles fell for a 14th consecutive session, to 122,275 tons, the lowest since Oct. 24.

Tin gained $50, or 0.4 percent, to $13,950 a ton. Inventories increased 2 percent to 11,370 tons.

Among other LME-traded metals, aluminum fell $6, or 0.2 percent, to $2,737 a ton, zinc slipped $35, or 1 percent, to $3,640 and lead dropped $2 to $2,303.

To contact the reporter on this story: Brett Foley in London at [email protected]

Last Updated: June 7, 2007 08:43 EDT