(Oct 23): Nickel pulled back on Friday as traders awaited clearer signals from Chinese companies considering coordinated output cuts at their Indonesian operations.

Three-month nickel on the London Metal Exchange fell 1.15% to US$15,935 a metric ton as of 0730 GMT, giving back part of Wednesday's gains. The most-traded November nickel contract on the Shanghai Futures Exchange closed 1.53% lower at 120,300 yuan (US$18,030.85) a ton.

Reuters reported on Thursday that Chinese producers in Indonesia were considering halving output of mixed hydroxide precipitate used to make electric vehicle battery chemicals, and cutting nickel pig iron, a stainless steel ingredient, by 20%.

No final decision had been reached, and the size and duration of any cuts remained uncertain.

Australia-listed Nickel Industries said producers at the Indonesia Morowali Industrial Park would coordinate cutbacks, without giving figures.

Traders remained sceptical about whether the proposed cut would eventually materialise, and whether it would take into account reductions already underway across the industry for months.

Chinese broker Galaxy Futures said high inventories and weak demand were limiting nickel's rebound this week, with production schedules for nickel-based batteries easing and stainless steel demand falling short of seasonal expectations, adding that the market was waiting for the proposed cuts to materialise.

Warehouse stocks remained at elevated levels, despite recent drops.

LME nickel stocks stood at 280,674 tons, as of Wednesday, while SHFE warehouse stocks held 105,488 tons as of Friday, according to both exchanges' latest stock reports.

The International Nickel Study Group last week forecast a small global surplus this year, reversing an earlier deficit forecast.

Among other LME metals, copper gained 0.63%, zinc rose 0.57%, lead added 0.32% and aluminium was up 0.27%. Tin climbed 1.00%.

On the SHFE, copper closed 0.08% lower and zinc fell 0.53%. Aluminium gained 0.77%, tin  rose 0.37% and lead added 0.19%.

Uploaded by Liza Shireen Koshy