Nickel's three-month price on the London Metal Exchange was down by 1.6% during morning trading on Tuesday December 22, with the rest of the complex mostly trading lower given the spread of a new variant of Covid-19 across Europe.
The LME nickel price was the most affected on Tuesday morning, dropping to $16,980 per tonne from Monday's 5pm close of $17,267 per tonne.
The stainless-steel additive started the week with a 0.8% gain to $17,630 per tonne on Monday morning from December 18's closing price of $17,484 per tonne, but has since dipped together with the rest of the metals on the LME.
News of the passing of a $900 billion stimulus package to help with the economic consequences of the pandemic in the United States in the early hours of Tuesday failed to offset growing concerns surrounding the Covid-19 variant.
"Perhaps, given how strong prices have become, the fact that the holiday period and year-end are approaching and there is uncertainty over how this new variant of Covid-19 will be handled by governments, this might mean there is a new risk that demand could be hit if more stringent lockdowns that affect manufacturing are imposed again," Fastmarkets' head of base metals and battery research William Adams said.
"Overall, we would not be surprised to see prices fall further now," he added.
Lead was down for a second day in a row to $1,944.50 per tonne on Tuesday morning. The metal was the worst performer on Monday morning, falling by 3% to $1,975 per tonne from December 18's 5pm closing price of $2,039.50 per tonne.
Nevertheless, there was a 5,255-tonne cancellation in LME lead stocks on Tuesday, spread across warehouses in Antwerp (1,375 tonnes), Hamburg (1,000 tonnes), Rotterdam (1,850 tonnes) and Vlissingen (1,000 tonnes).
Market seasonality boosts lead demand in the latter part of the year, reflecting strong seasonal demand due to the traditional winter battery-kill season in the northern hemisphere, Fastmarkets analyst James Moore said in a morning note.
Lead's sister metal zinc had a 3,075-tonne fresh cancellation on Tuesday, largely from LME warehouses in Singapore (2,550 tonnes).
Zinc's price was also down, by 0.47%, on Tuesday morning to $2,821 per tonne. On December 18 at 5pm it sat at $2,872.50 per tonne, close to its 2020 high of $2,890 per tonne reached on December 11.
Other highlights
Copper's price was down by 0.6% to $7,800 per tonne on Tuesday morning. Tin bucked the downward trend exhibited by its peers on Tuesday, rising to $20,000 per tonne as at 9am from $19,950 per tonne at the 5pm close on Monday, which was a 0.5% drop from December 18. The US dollar index was higher at 90.28 as at 9.30am, up from 90.23 at a similar time on Monday. The index reached a high of 91.01 on Monday, a "knee-jerk move to the upside after safe-haven buying emerged," Adams said, after last week's low at 89.73. Data out later today includes US readings on gross domestic product, existing home sales and the Richmond manufacturing index.