Nickel Prices Head for Longest Run of Monthly Gains Since 2009

Apr 25, 2014 2:13 pm ET

April 25 (Bloomberg) -- Nickel prices rose, heading for the longest run of monthly gains since 2009, on concern that more sanctions from the U.S. and Europe will be imposed against Russia, the world’s largest producer of the refined metal.

As Ukraine tensions mount, the Group of Seven nations are preparing new measures against Russia, German Chancellor Angela Merkel said. Indonesia, the top nickel producer from mines, banned exports of unprocessed ore in January.

“At one point next week, markets will likely have to deal with the increased likelihood of another round of sanctions being imposed,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report. “We expect to see some fallout on ‘Russian-centric’ commodities like oil, nickel, platinum, palladium and aluminum.”

Nickel for delivery in three months climbed 0.5 percent to $18,445 a metric ton at 5:51 p.m. on the London Metal Exchange. The price headed for the fifth straight monthly gain, the longest rally since August 2009. The commodity has jumped 33 percent this year.

This month, nickel has climbed 16 percent, heading for the biggest increase since March 2010. Yesterday, the price reached $18,600, the highest since Feb. 6, 2013. The commodity, used to make stainless steel, rose to a record $51,800 in May 2007.

The Indonesian ban will boost raw-material costs and curb output in Japan, the nation’s biggest ferro-nickel makers said. The nickel market faces a shortfall of 100,000 tons in 2015, the first since 2010, BNP Paribas SA said yesterday.

Copper for delivery in three months gained 0.2 percent to $6,765 a ton ($3.07 a pound) on the LME. Aluminum, zinc, lead and tin dropped.

On the Comex in New York, copper futures for July delivery rose 0.2 percent to $3.093 a pound. The price climbed for the third straight week, the longest rally since mid-August.

--With assistance from Jae Hur in Tokyo and Maria Kolesnikova in London.