(Updates with closing prices)
By Pratima Desai
LONDON, June 13 (Reuters) - Nickel prices retreated from three-week highs on Friday after the market scaled back its expectations of supply disruptions in Australia, while lead hit a 16-month low.
Copper MCU3 on the London Metal Exchange ended up at $7,980 a tonne from $7,835 a tonne on Thursday as the market waited for clues on future demand from top consumers China and the United States.
Stainless steel raw material nickel MNI3 hit $24,950 a tonne, the highest since May 22, and closed at $24,000 a tonne from $24,500 a tonne on Thursday when it rallied by about 6 percent.
Thursday’s gains came after mining giant BHP Billiton (BHP.AX) BLT.L said it had brought forward a four-month refurbishment at its 100,000 tonne per year Kalgoorlie smelter. [ID:nSYD320383]
But news that BHP was hoping to export more nickel concentrates to other processing plants over the next four months dampened nickel market sentiment on Friday. [ID:nL1377896]
“Taking into account shipping delays, there will be a modest loss. Output will ultimately be pushed back from 2008 to 2009,” said David Thurtell, analyst at BNP Paribas.
“I suspect that with recent softness in demand ... There will be plenty of spare refining capacity to take BHP’s material, but it depends on port capacity.”
Soft demand from the stainless-steel-making industry, which consumes around two-thirds of the world’s nickel, has helped push nickel prices down more than 30 percent since early March.
Lead touched $1,752 a tonne, the lowest since February 2007. It ended at $1,775 a tonne from $1,830 on Thursday.
The metal has ceded more than 50 percent since hitting a record high of $3,890 a tonne in October 2007.
Rising stocks of lead in LME warehouses, up about 70 percent to 79,300 tonnes since early March, have dampened enthusiasm for the metal used to make batteries.
However, analysts say the sell-off has been overdone.
“We expect prices to rebound to an average of $2,950/t in (the third quarter of 2008) on the expectation of a strong pick up in Chinese buying over the summer,” Barclays Capital said in a note.
“For copper, aluminium and tin, further production losses look likely, as a host of problems ranging from power shortages, to labour unrest and low ore grades appear likely to persist and we think these markets have the best upside price prospects.”
Copper, used widely in power and construction, has come under pressure recently from the rising dollar, which makes metals more expensive for holders of other currencies.
Analysts also cite concerns about whether China, which is currently aggressively tightening monetary policy, can offset falling demand from the United States where housing and construction are in recession.
Aluminium MAL3 was at $2,945 a tonne from $2,950 on Thursday, but analysts expect power shortages in China, the worlds biggest consumer of the metal used in power, packaging and transport, to underpin prices.
Zinc MZN3 was at $1,900 from Thursday’s last bid at $1,870 and tin MSN3 was at $21,000 from $21,075. Metal Prices at 1612 GMT Metal Last Change Pct Move End 2007 Ytd Pct
move LME Cu 7940.00 105.00 +1.34 6670.00 19.04 SHFE Cu* 60280.00 330.00 +0.55 56880.00 5.98 LME Alum 2944.00 -6.00 -0.20 2403.00 22.51 SHFE Alu* 18885.00 -45.00 -0.24 18180.00 3.88 COMEX Cu** 361.90 8.65 +2.45 303.05 19.42 LME Zinc 1900.00 -20.00 -1.04 2370.00 -19.83 SHFE Zinc* 15730.00 30.00 +0.19 18950.00 -16.99 LME Nick 23900.00 -600.00 -2.45 26350.00 -9.30 LME Lead 1760.00 -70.00 -3.83 2550.00 -30.98 LME Tin 21000.00 -500.00 -2.33 16400.00 28.05 ** 1st contract month for COMEX copper * 3rd contact month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Reporting by Pratima Desai; editing by Nigel Hunt)