Nickel Posts Longest Rally in 42 Months on Global Supply Concern

Apr 11, 2014 1:53 pm ET

April 11 (Bloomberg) -- Nickel prices rose, capping the longest rally more than three years, as Indonesia’s ban on ore exports limits supplies, triggering forecasts for a global shortfall.

The ban “alone is likely to shift the nickel market from structural oversupply to a balanced outcome this year, with sizable deficits probably over coming years,” Societe Generale SA said in a report. “Stronger global growth outlook is likely to drive nickel usage in stainless and non-stainless sectors.”

The price rose to a 13-month high, while stockpiles monitored by the London Metal Exchange posted the biggest weekly drop since June 2012. Tensions between Ukraine and Russia, the home to OAO GMK Norilsk Nickel, the world’s biggest producer of the refined metal, also may threaten shipments, Tom Price, a UBS AG commodity analyst in Sydney, said in a Bloomberg Television interview.

Nickel for delivery in three months climbed 1.9 percent to settle at $17,400 a metric ton at 5:50 p.m. on the LME. Earlier, the metal reached $17,495, the highest since Feb. 20, 2013. The price gained for the 10th straight day, the longest rally since Oct. 6, 2010.

This year, nickel may top $19,000, Societe Generale said. The price has jumped 25 percent in 2014. Indonesia banned shipments of raw ore in January.

On the Comex in New York, copper futures for May delivery fell 0.1 percent to $3.0415 a pound. Earlier, the price reached $3.08, the highest for a most-active contract since March 7.

In London, aluminum, lead, zinc and tin dropped, while copper gained 0.2 percent.

--With assistance from Jae Hur in Tokyo.