Oct 27 (Reuters) - Nickel prices reversed course to recoup early losses on Friday, but were set for their biggest weekly decline in a month, pressured by a surplus in the global market.
Three-month nickel on the London Metal Exchange edged 0.2% higher to $18,120 per metric ton by 0633 GMT. Still, the futures contract was down 2.5% on a weekly basis, and poised for its worst weekly decline since Sept. 29.
The most-traded November nickel contract on the Shanghai Futures Exchange shed 1.2% to 145,980 yuan ($19,951.89) a ton.
"We forecast a surplus in the global nickel market in 2023 of 307,000 tons, expanding from the surplus of 126,000 tons seen in 2022," BMI analysts said in a note.
However, LME nickel prices could rally to around $20,000 a ton on stretched fund short positioning, supply risk in top producer Indonesia and potential further Chinese easing, Citi analysts said.
Other non-ferrous metals on the LME rose as a rally in the dollar paused, making greenback-priced commodities less expensive in other currencies, and profits at China's industrial firms extended gains for a second month in September.
LME aluminium advanced 0.3% to $2,205 a ton, zinc edged up 0.7% to $2,451.50, copper rose 0.8% to $8,048 and lead increased 0.5% to $2,103.50 while tin was flat at $24,800.
SHFE copper rose 0.4% to 66,880 yuan a ton, aluminium declined 0.5% to 18,905 yuan, zinc shed 0.2% to 21,065 yuan, lead advanced 0.5% to 16,295 yuan and tin lost 1% to 212,680 yuan.
"We expect some recovery to metal prices in 2024 as U.S. dollar strength subsides, especially in the second half of 2024, although this is likely to be largely limited by a slowdown in global consumption levels," BMI said.
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($1 = 7.3166 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Sohini Goswami and Sherry Jacob-Phillips)
