BLBG: Nickel, Zinc Retreat in London as Global Recession Crimps Use
Nickel and zinc fell in London as a global economic slowdown weakened demand for industrial metals, adding to inventories.
Zinc stockpiles tracked by the London Metal Exchange climbed 18,900 metric tons, or 8.1 percent, to 253,625 tons, the highest since May 2006. ArcelorMittal Chief Executive Officer Lakshmi Mittal doesn’t expect any recovery in steel demand until the second half of 2009, he told the Luxemburger Wort newspaper. Zinc and nickel are used to make galvanized and stainless steel respectively.
“The ongoing economic gloom weakened metals demand,” David Thurtell, an analyst at Citigroup Inc., said today by phone from London.
Nickel for delivery in three months lost $100, or 1 percent, to $9,650 a ton as of midday local time, taking this year’s decline to 63 percent. Zinc dropped $10, or 0.9 percent, to $1,148 a ton.
Exports slumped at an unprecedented level in Japan last month and sales of single-family houses in the U.S. dropped by the most in two decades, signaling the recession in both nations deepened. The LME index of six metals has lost 52 percent this year, the most since Bloomberg records began in 2001.
Weakening demand also shuttered smelters and mines. Toledo Mining Corp. laid off 600 employees and contractors at its Berong nickel mine in the Philippines after prices plunged 63 percent this year, the London-based company said today.
Declining Output
China’s Sichuan Aostar Aluminum Co. closed all its 250,000- ton capacity as prices slumped, the company said today. Global output of the metal used in cans and cars fell 6.7 percent in November from a month earlier as production dropped to a 19-month low in China, according to the International Aluminium Institute.
Aluminum fell $10.25, or 0.7 percent, to $1,549.75 a ton.
Production cuts have yet to be reflected in inventories, which are at a 14-year high. Stockpiles of aluminum tracked by the LME rose 17,400 tons, or 0.8 percent, to 2.25 million tons, the exchange said today.
In Guinea, which has the world’s biggest reserves of bauxite used in aluminum production, the army suspended the constitution and dissolved the government. BHP Billiton Ltd. closed its office in the African country, where it is considering a $4.8 billion alumina refinery. United Co. Rusal and Alcoa Inc. run bauxite and alumina operations in Guinea.
Among other LME-traded metals, lead added $9, or 1 percent, to $875 a ton. Tin fell $50 to $9,900 a ton. Copper slid $10, or 0.4 percent, to $2,860 a ton.
