Nickel fell to the lowest in a week, leading industrial metals lower and slipping below aluminum and zinc as the London Metal Exchange’s top performers this year.

Nickel Leads Metals Down

Nickel dropped as much as 1.6 percent today after slumping 3 percent yesterday as inventories tracked by the LME rose to a record 385,860 metric tons. Aluminum, which displaced nickel as the biggest gainer on Nov. 3, has climbed 13 percent this year. Zinc moved into second place today with an 8.8 advance as nickel trimmed its rise to 8.2 percent.

Nickel dropped for two consecutive months as increased ore supply from the Philippines helped avert a shortage after Indonesia, the largest mined producer, banned raw ore exports from January. Demand growth is weakening in Europe and China for the metal used to make stainless steel, Morgan Stanley said Nov. 3. Aluminum has gained for eight of the last nine months amid falling global production and an improving demand outlook.

“China built so much inventory and there’s so much refined nickel coming into the market this year,” said Ian Roper, an analyst at CLSA Ltd. in Singapore. “Aluminum has had a great year, with the supply discipline we’ve seen and improved demand has meant the ex-China story has been very strong.”

Aluminum stockpiles fell to 4.42 million tons yesterday, the lowest in more than three years. The aluminum market was in a deficit of 304,000 tons through the first eight months of the year, the World Bureau of Metal Statistics said Oct. 22. Demand for the metal used in everything from automobiles to drink cans will grow by 5 percent next year in the U.S., the second-largest metals consumer, JPMorgan Chase & Co. said Oct. 28.

Philippine Ore

The Philippines this year replaced Indonesia as the largest ore supplier to China, the world’s biggest nickel user. Ore supplies have practically vanished from Indonesia after it enacted an export ban on unprocessed minerals to spur investment in its metals-processing industry.

All metals on the LME fell today, extending losses after the European Commission yesterday cut growth forecasts for the euro area, damping the demand outlook.

“There’s no contribution from Europe growth, which just puts extra pressure on China,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “It’s just all doom and gloom at the moment.”

Aluminum for delivery in three months on the LME dropped 1.2 percent to $2,037 a ton at 2:50 p.m. in Hong Kong. Zinc fell 0.7 percent at $2,235 a ton while nickel slid 1.6 percent to $15,043 a ton.

Copper in London slipped 1 percent to $6,580.75 a ton. In New York, the December futures contract fell 1.2 percent to $2.983 a pound, while in Shanghai the metal for January dropped 2.4 percent to 46,580 yuan ($7,619) a ton.