The most-traded June nickel contract on the Shanghai Futures Exchange closed down 3.6% at 122,260 yuan ($18,658.24) a tonne by 0730 GMT, while three-month nickel on the London Metal Exchange declined 2.7% to $16,180 a tonne.
Chinese Premier Li Keqiang stressed the need to strengthen market regulation of raw materials to ease the cost pressure of enterprises amid rising global commodities prices, China's official Xinhua news agency reported. (bit.ly/2PV89K7)
“Comments from Chinese Premier Li Keqiang weighed on markets as it is the second time in just a few days top officials talk about cost controls,” said commodities broker Anna Stablum in a note.
Stablum was referring to Chinese vice-premier Liu He’s remarks last week calling to stabilise prices, after the country’s factory gate prices (PPI) rose at their fastest annual pace in nearly three years.
LME copper fell 1.4% to $8,801.50 a tonne, zinc was down 1.5% at $2,788 a tonne, while tin decreased 0.7% to $25,570 a tonne.
In Shanghai, copper declined 1.8% to 65,690 yuan a tonne, zinc fell 2.2% to 21,535 yuan a tonne, while tin dropped 2.5% to 178,190 yuan a tonne.
However, ANZ analyst Soni Kumari said that the strong PPI number suggested strong China’s demand for commodities, adding that the country’s central is unlikely to react imminently to inflation risks without further improvement in the job market.
“We suspect release of stockpiles could happen for other metals (recently for aluminium), if the government remains serious about taming commodities prices,” she said. FUNDAMENTALS
* Yangshan copper premium SMM-CUYP-CN fell to $51 a tonne, its lowest since Nov. 20, while inventories in LME and ShFE warehouses MCUSTX-TOTALCU-STX-SGH remained elevated. ($1 = 6.5526 yuan) (Reporting by Mai Nguyen; Editing by Sherry Jacob-Phillips and Jason Neely)