NIckel:BloombergNickel Gains in London After First Stockpile Decline in a Week
By Chanyaporn Chanjaroen
March 7 (Bloomberg) -- Nickel gained in London for a second day as the first decline in inventories in a week stoked speculation that a shortage of the metal will persist.
Stockpiles monitored by the London Metal Exchange dropped 4.3 percent to 3,648 metric tons, the LME said today in a daily report. That's less than two days of global consumption. The metal is mostly used to make stainless steel.
``The cupboard is bare,'' Nick Moore, a metals analyst at ABN Amro Holding NV in London, said in a telephone interview. Nickel is ``immune'' to declines of the magnitude metals such as copper and zinc have registered in the past year, he added.
Nickel for delivery in three months on the LME gained $1,600, or 4 percent, to $42,000 a ton as of 12:46 p.m. in London. The metal traded at a record $42,200 on March 1.
Nickel has more than doubled in the past year as demand from China, the world's largest user, expanded. Consumers have tapped stockpiles to plug a gap in production last year that Xstrata Plc, the world's fourth-largest nickel producer, estimated was 34,000 tons.
Tin gained $350 to $13,650 a ton after Indonesia, the world's second-largest producer of the metal, said it may impose a quota on exports to keep prices above $12,000.
The proposal would keep the global market from being oversupplied, Mangantar Marpaung, the director for coal and geothermal development at the energy and mineral resources ministry, said in Jakarta today. The nation is trying to curb illegal tin mining. China is the largest producer of the metal.
Aluminum Shortage Eases
A price of more than $12,000 may ``distort market fundamentals'' and lead to new sources of supply being brought into production in other parts of the world, Neil Buxton, managing director of GFMS Metals Consulting Ltd., said in an interview.
Aluminum gained $12 to $2,706 a ton. A shortage of the lightweight metal on the LME is easing after stockpiles gained 15 percent this year to 802,900 tons. Buyers of aluminum for immediate delivery paid $3 more than the benchmark three-month price, the smallest difference since Dec. 7, according to LME data.
In a market with adequate supply, buyers typically pay less for metal for immediate delivery than longer-dated contracts.
Also on the LME, copper gained $85 to $6,065 a ton. Lead added $30 to $1,850 and zinc increased $45 to $3,355.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at
Last Updated: March 7, 2007 07:48 EST
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