Nickel Prices Rise for Sixth Day as Norilsk Forecasts Deficit

Apr 07, 2014 1:57 pm ET

April 7 (Bloomberg) -- Nickel prices rose for the sixth straight session after OAO GMK Norilsk Nickel, the world’s largest producer of the refined metal, said the market may face a deficit as early as the third quarter.

Demand from stainless-steel makers remains stable after Indonesia barred ore exports in January, Norilsk said today. The nation is the top producer of nickel from mines. China, the biggest consumer of industrial metals, outlined last week a package of measures including railway spending and tax relief to support the economy.

“You already have the Indonesia export ban, and you have Norilsk adding to the worries about shortages,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “You also have hopes that China may be on the verge of some kind of additional stimulus, and that will drive demand for nickel.”

Nickel for delivery in three months gained 0.1 percent to settle at $16,410 a metric ton at 5:51 p.m. on the London Metal Exchange. This year, the price has climbed 18 percent, reaching a 12-month high on April 4.

“There are increasing indications that the ban on the export of nickel ore from Indonesia will be sustained, which leads us to expect the nickel market to be balanced in 2014, but developing a sizable deficit in 2015,” Moscow-based Norilsk said.

Inventories tracked by the LME declined for the seventh session, the longest slump since June 2012.

Copper for delivery in three months rose 0.8 percent to $6,675 a ton ($3.03 a pound) in London. On the Comex in New York, futures for May delivery rose 0.6 percent to $3.0395 a pound.

Lead and tin gained in London, while aluminum and zinc fell.

--With assistance from Jae Hur in Tokyo.