* Stainless steel prices rise, stocks build in China
* Copper down on profit-taking on long positions (Adds official close)By Pratima DesaiLONDON, March 4 (Reuters) - Nickel prices climbed to asix-month peak on Monday as expectations of a fourth consecutiveyear of supply deficit were reinforced by signs of robust demandfrom stainless steel mills in China.Benchmark nickel on the London Metal Exchange ended0.5 percent up at $13,255 a tonne, having touched its highestsince the end of August at $13,485. The price has risen 24percent this year, the best performer among LME metals."Ultimately the nickel market has been in deficit for threeyears running and we are expecting another deficit this year,"said Roskill senior analyst Olivier Masson.
"The nickel price was probably oversold at the end of lastyear, when the market was worrying about global trade,"
TRADE: The trade dispute between China and the United Stateshas fuelled concern about global growth and demand, underminingsentiment in metals markets.DEFICIT: Data from the International Nickel Study Groupshows the nickel market deficit at 46,000 tonnes in 2016,115,000 tonnes in 2017 and 127,000 tonnes last year.
Global nickel demand is estimated at about 2.4 milliontonnes this year. Of that, about two thirds is destined forstainless steel mills, mostly in China. "The price of stainless steel continues to rise (and) supplyof ferronickel is very tight," GF Futures said in a note, addingthat Wuxi Stainless Steel Exchange inventories had risen by morethan 10,000 tonnes, or 4.2 percent, since the first half ofFebruary.STOCKS: Nickel stocks at 196,542 in LME-registeredwarehouses have nearly halved since the start of January lastyear, while cancelled warrants -- metal earmarked for delivery-- stand at 37 percent. Inventories in warehouses monitored by the Shanghai FuturesExchange are below 10,000 tonnes and have fallen nearly 40percent since the middle of November. SPREADS: Traders say the discount for the cash over thethree-month contract is an incentive to buy nickel and sell itforward on the LME. The discount, or contango, of about $80 atonne is enough to cover financing costs and leave a healthyprofit. "The weaker macro numbers we are getting, especially out ofChina, suggest that negative demand influences will eventuallykick in and start to replenish stockpiles," said INTL FCStoneanalyst Edward Meir.PROFIT-TAKING: Prices of copper are down on profit-taking byfunds with long positions betting on higher prices.Traders say the market has been long on copper for sometime. Others say the premium for the cash over the three-monthcontract at $34 a tonne should attract metal to LME warrant,relieving some of the tightness.PRICES: LME copper was down 1.1 percent at $6,409 atonne, aluminium fell 2.2 percent to $1,875.50, zinc slipped 1.2 percent to $2,751, lead ceded 1.4percent to $2,113 and tin finished 0.8 percent lower at$21,450. (Reporting by Pratima DesaiEditing by David Goodman)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.