Bull market in metals is underway
Nickel Climbs to Two-Month High on Outlook for Economic Rebound
London, Jan. 7 (Bloomberg) -- Nickel prices climbed almost 5
percent to their highest in nearly two months on traders'
expectations that U.S. economic growth will rebound, boosting
demand for stainless steel, the main use of the metal.
Nickel climbed after reports last week that U.S. job losses
fell to their lowest in four months in December while employment
in construction rose, signaling that recession may end this year
in the biggest economy. Prices of copper, aluminum and zinc also
rose.
``There is a definite New Year cheer around,'' said Martin
Squires, an analyst at J.P. Morgan Chase & Co. ``The economic data
out of the U.S. suggests that recovery can be seen on the
horizon.''
Nickel for delivery in three months rose as much as $280, or
4.9 percent, to $6,030 a metric ton on the London Metal Exchange.
It has risen by a quarter in the past two months after sinking 34
percent in the previous six months as economies slowed.
Nickel inventories in LME warehouses have dropped 8 percent
from their high for the last six months on Dec. 19, signaling
increased demand for the metal.
Copper advanced as much as $37, or 2.5 percent, to $1,506 a
ton on the LME, making an increase of 12.5 percent from its low on
Nov. 7. Consumption of copper is expected to exceed supply this
year, after producers such as Chile's Codelco and BHP Billiton
Group cut output, Squires said. Builders are the biggest users of
copper.
Zinc rose as much as $17, or 2.1 percent, to $844 a ton, its
highest for almost four months, while aluminum gained as much as
$38, or 2.8 percent, to $1,389 a ton.
Aluminum use will also outstrip production this year after
cutbacks last year by top producer Alcoa Inc. and others, Squires
said. Nickel and zinc supplies are expected to be in surplus.
OAO GMK Norilsk Nickel, the world's biggest nickel producer,
said Dec. 29 it will suspend exports of the metal at least through
January after shipping 14 percent more than planned last year.
--Jon Hurdle in the London newsroom (44) 207 673 2095 or
jhurdle1@bloomberg.net/chm |
