Nickel Gains in LondonNickel Gains in London as Stockpiles Decline to 8-Month Low
By Chanyaporn Chanjaroen
July 21 (Bloomberg) -- Nickel rose in London, rebounding from a two-year low, as stockpiles of the metal used in stainless steel declined to the smallest in eight months, indicating supply is slowing.
Inventories tracked by the London Metal Exchange dropped 6 percent this month to 43,728 metric tons, the lowest since Nov. 23. BHP Billiton Ltd. this month shut its Kalgoorlie refinery in Western Australia through June 2009, cutting sales of the metal by 25,000 tons, or about 57 percent of existing LME stockpiles.
``You probably started to see the impact from supply disruption in Western Australia,'' Max Layton, an analyst at Macquarie Ltd. in London, said today by phone. ``It may be short- lived and overall we see a small surplus this year.''
Nickel for delivery in three months added $401, or 2 percent, to $20,801 a ton as of 10:35 a.m. London time. The contract closed July 18 at $20,400 a ton, the lowest since June 28, 2006.
The metal is headed for a second consecutive annual drop, after last year's 21 percent decline as stainless-steel mills resorted to products containing less nickel. Prices may have to fall to about $15,000 a ton to lure back consumers, Charles Cooper, an analyst at Evolution Securities Ltd., said today.