Nickel Gains in London as Inventory Has Biggest Drop in 6 Weeks
By Katy Watson
Aug. 31 (Bloomberg) -- Nickel rose in London after inventory fell the most in six weeks, fuelling concern that supply may fail to keep pace with growing demand from stainless- steel makers.
Stockpiles of monitored by the London Metal Exchange dropped 720 metric tons, or 12 percent, to 5,172 tons, the LME said today in a daily report. That's the biggest percentage decline since July 14. Rising consumption from groups such as Chinese stainless-steelmakers may create a global production shortfall of 25,000 tons this year, Societe Generale said last week. Nickel prices have more than doubled in 2006.
``Stainless steel has held up really quite strongly and therefore so has nickel,'' said David Thurtell, a metals analyst at BNP Paribas in London. ``Things are still very tight and those stocks declines today underscore that.''
Nickel for delivery in three months on the LME climbed $1,000, or 3.6 percent, to $28,500 a metric ton as of 11:48 a.m. local time. It traded at a record $29,950 on Aug. 22.
Nickel for immediate delivery is even more costly. The premium for cash over three-month futures was bid at $4,000 a ton on the LME. In an adequately supplied market, commodities for future delivery usually cost more.
The stockpile levels for nickel are ``extremely meager,'' said Tony Warwick-Ching, an analyst at CRU, a London-based consulting company. ``All the signs are that demand is very solid for the end-product.''
Also on the LME, copper gained $180 to $7,630 a ton, aluminum added $23 to $2,508, lead rose $20 to $1,235, tin was $125 higher at $8,975 and zinc advanced $70 to $3,410.
Workers at BHP Billiton Ltd.'s Escondida copper mine, the world's largest, are set to vote today in Chile on a new labor contract, ending a 25-day strike that's disrupted supply.
BHP Billiton agreed to increase wages by 5 percentage points above inflation and pay a 9 million Chilean peso ($16,705) bonus, company spokesman Mauro Valdes said yesterday from Santiago. Workers may return as early as tomorrow, he said. The offer was ``acceptable,'' union President Luis Troncoso said yesterday after presenting it to his members.
To contact the reporter on this story: Katy Watson in London at kwatson@bloomberg.net
Last Updated: August 31, 2006 06:52 EDT |
