ni may take months to recover

Nickel Falls in London as China, Japan Demand Not Yet Recovered

By Chanyaporn Chanjaroen

Dec. 10 (Bloomberg) -- Nickel fell the most in a week on concern that demand in China and Japan, the world's largest consumers of the stainless-steel ingredient, may take months to recover. Copper and lead also dropped.

Gansu, China-based Jinchuan Group Co., Asia's biggest nickel producer, cut prices for the second time since September. Nippon Steel & Sumikin Stainless Steel Corp. said it cut output of stainless-steel sheets to 30 percent below full-capacity for the rest of this financial year after a drop in Japanese housing starts curbed demand. The Japanese fiscal year ends in March.

``It can be a very long and slow recovery process,'' said Michael Jansen, an analyst at JPMorgan Securities Ltd. in London. ``It's more of a 2008 story than now.''

Nickel for delivery in three months dropped $700, or 2.6 percent, to $26,700 a metric ton on the London Metal Exchange as of 10.15 a.m., the biggest intraday decline since Dec. 4. The contract rose 5.4 percent on Dec. 7.

Nickel, mostly used in stainless steel, has lost 48 percent from record $51,800 in May after steel mills cut usage and stockpiles.

Metal stockpiles monitored by the LME rose 234 tons, or 0.5 percent, to 45,012 tons, the exchange said today in a daily report. They've risen seven consecutive months to the highest since Jan. 19, 2000.

``Any recovery of usage at steel mills hasn't fed through to LME stockpiles,'' Jansen said.

Lead Shipments

Ivernia Inc., blocked in March from exporting about 3 percent of the world's mined lead because of contamination concerns, may be able to resume shipments from Western Australia after the state's environmental regulator recommended the Toronto-based company start using the port of Fremantle.

The state's Environment Minister David Templeman will make the final decision, Charlie Maling, a spokesman for the Environmental Protection Authority, said today by phone from Perth.

Lead fell $26 to $2,645 a ton.

Copper dropped $50 to $6,860 a ton, aluminum lost $13 to $2,468 and tin declined $100 to $16,600. Zinc increased $3 to $2,433.

Following are technical gauges for nickel:



20-day moving average 28,797
100-day moving average 29,906
200-day moving average 36,647
14-day relative strength index 35.40

Fibonacci Start End 50% 61.8%
24,800 51,800 38,300 41,486