“Industrial metals prices will consolidate due to a marked slowdown in China’s metals consumption growth,” BMI Research wrote in an emailed note.

China’s frenzied construction of roads, bridges and subways is set for a major slowdown, adding a headwind to economic growth in 2018. Fixed-asset investment in infrastructure will grow 12 percent next year, according to the median estimate in a Bloomberg survey, down from almost 20 percent in the first ten months this year.

All 18 economists in the survey anticipated a moderation, adding to reports by Morgan Stanley, Goldman Sachs Group Inc. and UBS Group AG predicting a similar trend.

Adding to the selloff is speculation that metals prices have overshot fundamentals in the recent run up. Nickel has retreated 13 percent since early November, giving up some gains from earlier in the year.

"The recent rally in nickel was mostly due to expectations of increased use of the metal in batteries, which will definitely realize some day, but right now stainless steel, not EVs, is still major consumer of nickel and its market driver," Boris Krasnojenov, an analyst at Alfa Bank in Moscow, said by phone.

Eoin Treacy's view

China has infrastructure on par with many developed countries and has more spare steel capacity, for example, than the entire industries of Japan, South Korea and Taiwan combined. At some point there will be a rationalization of that industry. However the big question is what will replace it? 

The answer so far has been the evolution of a consumer culture that has created a domestic demand sector out of nowhere a decade ago. Quite whether it is yet large enough to absorb the millions of people working in infrastructure building and the materials sector is a big question for central planners. 

Copper inventories came in ahead of expectations today which contributed to today’s sharp pullback. The price has been ranging with an upward bias over the last couple of months and has now closed the majority of its overextension relative to the mean. It will need to continue to hold the $2.85 area if medium-term scope for continued upside is to be given the benefit of the doubt.  

ETFS Nickel is testing the region of the trend mean and will need to continue to hold the $10 is recovery potential is to be given the benefit of the doubt. 

The FTSE-350 Mining Index also pulled back today and is now testing the region of the trend mean where support will need to be found if near-term demand dominance is to be reasserted.