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Nickel prices fall on trade tensions

Nickel price have hit an eight-month low and zinc slipped to its lowest in three weeks as speculators added bearish positions against the backdrop of persistent international trade concerns and a slide in steel prices.

"The trade war theme is the overarching influence in the context of varying degrees of short positioning among the metals complex," said analyst Nicholas Snowdon at Deutsche Bank in London.

Losses deepened in European afternoon trading as technical levels were hit, spurring further selling by speculators, traders said.

US President Donald Trump warned last week that he was ready to levy additional tariffs on practically all Chinese imports, while China is prepared to ask the World Trade Organization next week for permission to impose sanctions on the United States.

Benchmark nickel on the London Metal Exchange closed down 1.5 per cent at $US12,230 a tonne after hitting $US12,165, its weakest since December 29 last year.

CTA (commodity trading advisers) funds unleashed more selling in the zinc market, Alastair Munro at broker Marex Spectron said in a note.

"Shorts are rebuilding, with the trend suggestive of the market testing ... that $US2,283 low from mid-August."

Three-month zinc dropped 2.9 per cent to finish at $US2,311 a tonne, its lowest level since August 16.

* STEEL PRICES: Nickel, largely used to make stainless steel, and zinc, mainly used for galvanising steel, were also pressured by a slide in Chinese steel futures.

Steel shed more than four per cent after a source involved with China's output-cut plan said the environment ministry could allow northern provinces to set their own production curbs over winter.

* ZINC STOCKS: LME zinc inventories have climbed by 74 per cent since the start of March to 229,675 tonnes.

* ALUMINIUM PRICE: Aluminium failed to build on its 1.3 per cent rebound on Monday after a report that Russian producer Rusal could begin output cuts this month because of US sanctions. LME prices fell 2.4 per cent to end at $US2,044 a tonne.

"I think we're probably still some way off from Rusal actually cutting production, but it's an indication of the scenario we could go back to as we saw in April," Deutsche Bank's Snowdon said.

* PRICES: Copper gave up early gains to close 0.9 per cent weaker at $US5,859 a tonne, lead dropped 3.1 per cent to $US1,965 a tonne after touching its lowest since August 16 at $US1,957.50, while tin dipped 0.2 per cent to $US19,045 a tonne.

* DOLLAR: The US dollar rebounded from losses and was trading 0.1 per cent firmer, making dollar-denominated assets such as commodities more expensive for buyers using other currencies.

Austrlaian Associated PressBack to Breaking News

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