Metals: Industrial Metals Fall on China Worries

By Ira Iosebashvili Features Dow Jones Newswires

Nickel prices tumbled for a second straight day Friday, as concerns about a slowdown in China weighed upon industrial metals.

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Nickel for delivery in three months was recently down 4.2%, at $10,550 a metric ton, on the London Metal Exchange. The drop follows a more than 5% decline on Thursday. Other base metals, including copper and aluminum, also declined.

Driving the losses are fears that the economy in China, the world's biggest raw materials consumer, is slowing as the effects of government stimulus ebb and policy makers clamp down on speculation and asset bubbles.

Standard & Poor's on Thursday became the last of three major ratings firms to downgrade China, saying that "a prolonged period of strong credit growth has increased China's economic and financial risks." Moody's Investors Service lowered its China rating in May, while Fitch Ratings did so in 2013.

The downgrade pushed some investors to lock in gains on industrial metals, after a sharp rally during the summer sent prices to multiyear highs. Earlier this month, China data showed the country's industrial production falling to its lowest level since December and investment growth contracting to a 17-year low.

"There is a general feeling that the recent rally...may have overshot and some retracement is therefore justifiable," wrote Edward Meir, a strategist at INTL FC Stone, in a note to clients.

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Aluminum was recently down 0.9%, at $2,150 a metric ton in London. Copper for December delivery fell 0.1%, to $2.9325 a pound, on the Comex division of the New York Mercantile Exchange.

In precious metals, December gold rose 0.5%, to $1,300.90 a troy ounce.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

Nickel prices tumbled for a second straight day Friday, as concerns about a slowdown in China weighed upon industrial metals.

Nickel for delivery in three months fell 5.3%, to $10,420 a metric ton, on the London Metal Exchange. The drop follows a more than 5% decline on Thursday. Other base metals, including copper and aluminum, also declined.

Driving the losses are fears that the economy in China, the world's biggest raw materials consumer, is slowing as the effects of government stimulus ebb and policy makers clamp down on speculation and asset bubbles.

Standard & Poor's on Thursday became the last of three major ratings firms to downgrade China, saying that "a prolonged period of strong credit growth has increased China's economic and financial risks." Moody's Investors Service lowered its China rating in May, while Fitch Ratings did so in 2013.

The downgrade pushed some investors to lock in gains on industrial metals, after a sharp rally during the summer sent prices to multiyear highs. Earlier this month, China data showed the country's industrial production falling to its lowest level since December and investment growth contracting to a 17-year low.

"There is a general feeling that the recent rally...may have overshot and some retracement is therefore justifiable," wrote Edward Meir, a strategist at INTL FC Stone, in a note to clients.

Aluminum was down 0.6%, at $2,158 a metric ton in London, while lead fell 1.2% to $2,483 a metric ton. Copper for December delivery rose 0.3%, to $2.9445 a pound, on the Comex division of the New York Mercantile Exchange.

In precious metals, December gold rose 0.2%, to $1,297.50 a troy ounce.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

(END) Dow Jones Newswires

September 22, 2017 17:52 ET (21:52 GMT)