Nickel Caps Biggest Three-Day Gain Since August on Export Ban

Jan 14, 2014 1:56 pm ET

Jan. 14 (Bloomberg) -- Nickel rose in London, capping the biggest three-session rally since August, on concern that global supplies will tighten during a ban on exports from Indonesia, the world’s biggest producer of the mined ore.

Global production of nickel may trail demand next year because of the ban, which took effect Jan. 12, Macquarie Group said in a report today. Prices fell during the past three years amid ample supplies. Nickel has rallied 3.2 percent this month, the most among the six main metals traded on the London Metal Exchange.

“The Indonesian situation is getting markets to adjust their view on the supply-demand balance,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “An increasing number of people are thinking we could get a negative balance. Some of the inventories that have been built may start unwinding at some point.”

Nickel for delivery in three months rose 0.9 percent to settle at $14,340 a metric ton at 5:51 p.m. on the LME in London, taking the three-day gain to 6.9 percent, the most since Aug. 9. Prices reached $14,400, the highest since Dec. 23.

The metal closed above the 200-day moving average for the first time since March. That may signal an extended rally to some traders who study price charts. Indonesia accounts for 18 percent to 20 percent of global supply of the metal, Goldman Sachs Group Inc. estimates.

Copper for delivery in three months lost 0.7 percent to $7,280 a ton ($3.30 a pound) in London. Zinc, lead and tin rose in London, while aluminum fell.

In New York, copper futures for delivery in March slipped 0.3 percent to $3.336 a pound on the Comex.

--With assistance from Jae Hur in Tokyo and Agnieszka Troszkiewicz and Maria Kolesnikova in London. Editors: Joe Richter, Steve Stroth