Nickel Advances for Fifth Day on Speculation Supply to Tighten

Jan 16, 2014 5:27 am ET

Jan. 16 (Bloomberg) -- Nickel rose for a fifth day in London, the longest winning streak since August, on speculation supplies are poised to tighten after a ban on ore exports from Indonesia, the biggest producer of the metal from mines.

Macquarie Group Ltd. and Barclays Plc expect the market to revert to a deficit next year following the prohibition, which took effect Jan. 12. Orders to draw nickel from stockpiles tracked by the London Metal Exchange gained the most in seven weeks today. Nickel climbed 4.9 percent so far in 2014, leading advances among the six main metals traded on the LME.

“Nickel continues to be the leader after the Indonesia ore ban,” said Mark Newson-Smith, head of sales at Xconnect Trading Ltd. in London. The measure also affected bauxite, the raw material for making aluminum.

Nickel for delivery in three months added 0.3 percent to $14,575 a metric ton by 10:02 a.m. on the LME after touching $14,645, the highest level since Nov. 1. Aluminum rose 0.3 percent to $1,789 a ton, headed for a fourth increase in five.

“Nickel and aluminum still draw support from Indonesia concerns,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “For the likes of copper, activity is slowing ahead of the Lunar New Year holiday in China at the end of the month. Some small-scale profit-taking is possible.”

Copper for delivery in three months lost 0.5 percent to $7,313 a ton in London and the metal for delivery in March fell 0.5 percent to $3.341 a pound on the Comex in New York.

Stockpiles of copper monitored by the LME rose 0.2 percent to 336,825 tons after 50 sessions of drops, daily data showed. Orders to draw the metal from warehouses, or canceled warrants, fell 2 percent to 195,700 tons. Nickel canceled warrants climbed 4.2 percent, the most since Nov. 25, to 107,202 tons.

Copper also retreated amid signs the metal is in ample supply. Rio Tinto Group’s production of mined copper rose 5 percent from a year earlier to 173,000 tons in the fourth quarter, a statement showed, lifting the increase for all of last year to 15 percent.

Tin, lead and zinc fell in London.

--With assistance from Jae Hur in Tokyo. Editors: Dan Weeks, Sharon Lindores