Nickel Rises to 14-Month High as Ukraine Boosts Supply Concerns

Apr 22, 2014 2:30 pm ET

April 22 (Bloomberg) -- Nickel climbed to a 14-month high on concern the collapse of an accord to ease tension between Ukraine and Russia may lead to disruptions in global supply that was already curbed by an Indonesia export ban.

Pro-Russian forces who seized buildings in eastern Ukrainian cities have said they are not bound by the deal reached in Geneva by Ukraine, the European Union, the U.S. and Russia, the second-largest producer of the refined metal. The nickel market will swing into a deficit this year for the first time since 2010 on Indonesia’s ban on shipments of unprocessed ores, according to Toru Higo, the general manager of nickel sales and raw materials at Sumitomo Metal Mining Co.

“We suspect that prices could push higher still, although the bulk of the move is likely behind us,” Edward Meir, an analyst at INTL FCStone in New York, said in an e-mailed note. “The situation in Ukraine is still very much front and center, in terms of market focus.”

Nickel for delivery in three months climbed 2.2 percent to settle at $18,325 a metric ton at 5:50 p.m. on the London Metal Exchange. Earlier, the price reached $18,350, the highest since Feb. 18, 2013.

Prices have climbed 32 percent this year. Demand will exceed supply by 30,000 tons, compared with a January estimate for a 55,000-ton surplus, said Higo of Sumitomo, Japan’s biggest producer. The deficit was 63,000 tons in 2010, he said.

On the LME, copper for delivery in three months rose 0.3 percent to $6,670 a ton ($3.03 a pound). Tin reached the highest since October, while aluminum, zinc, and lead gained.

On the Comex in New York, copper futures for July delivery rose 0.2 percent to $3.034 a pound.

--With assistance from Maria Kolesnikova in London.