LONDON, Jan 30 (Reuters) – Nickel led base metals lower on Tuesday as the dollar fell and investors booked profits from a rally that saw the stainless steel ingredient hit a high last seen more than two years ago. Benchmark LME nickel eased 1 percent to $13,670 ounces by 1210 GMT. The metal, which is also used in electric vehicle batteries, touched $14,040 per tonne on Monday, its highest since May 2015. “It’s most likely profit-taking. Base metals are down across the board and there has not been much reason for nickel to have been up in the first place,” said Societe Generale metals specialist Robin Bhar. He said the move lower by nickel was likely an unwinding of the speculative buying that pushed the metal higher last week. But he added that rising demand and falling stocks meant fundamentals for the metal were gradually improving. Nickel jumped 7.3 percent last week, making it the best performing base metal. INVENTORIES: On-warrant LME inventories of nickel, those not earmarked for delivery, fell to their lowest level in 2018 at 250,920 tonnes. POSITIONS: Funds have raised their bets on prices rising, with LME net long nickel positions rising to 47,708 lots on Jan. 26, the highest since Jan. 2017. DOLLAR: The dollar climbed for a second consecutive day on Tuesday as investors took profits into a recent drop in the greenback in the backdrop of firmer bond yields  and a central bank policy decision due this week. A stronger greenback makes dollar-denominated assets more expensive for holders of other currencies. SUPPLY: Nickel output by First Quantum Minerals fell 24 percent to 17,837 tonnes last year from 23,624 tonnes in 2016, the company said in a preliminary production and sales report on Friday. TRUMP: Investors were keeping an eye for positive signals about infrastructure building in the State of the Union address by U.S. President Donald Trump later in the day. NORWAY: Norwegian aluminium maker Norsk Hydro plans to transfer energy-saving technology from a pilot project to primary smelters in the next five to six years, boosting output and cutting costs, the company’s head of technology told Reuters. OTHER METALS: Aluminium fell 0.2 percent to $2,221.50 after touching its lowest in nearly two weeks, while tin dipped 0.2 percent to $21,880 but lead  bucked the downward trend to rise 0.6 percent to $2,618. Zinc was down 1 percent to $3,516 a tonne, having touched $3,584, its highest since July 2007, on Monday. Three-month copper was down 0.1 percent at $7,075 a tonne after slipping to its lowest in a week.

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