Nickel Climbs to Record on Shortage Outlook; Tin, Copper Gain
By Chanyaporn Chanjaroen
March 8 (Bloomberg) -- Nickel advanced to a record for a second day, leading gains in London, on expectations dwindling stockpiles of the metal will create a second year of shortages. Copper and tin rose for a third day.
Rising demand for industrial metals has left mining companies struggling to fill a supply gap, causing inventories to shrink. Nickel stockpiles monitored by the London Metal Exchange have plunged 90 percent in the past year and those of tin have fallen 34 percent.
``They are the tightest markets,'' Stephen Briggs, an analyst in London at Societe Generale who has tracked metals since 1980, said today by phone. Both metals are having a ``supply shock'' this year.
Nickel for delivery in three months on the LME gained $700, or 1.7 percent, to $42,700 a ton as of 10:52 a.m. in London. It earlier traded at $43,150 a ton, beating yesterday's high by $800. Copper added as much as $190, or 3 percent, to $6,330 a ton. Tin rose $700, or 0.7 percent, to $13,700 a ton, close to the 17-year high of $13,900 traded Feb. 21.
LME-tracked nickel inventories dropped 222 tons, or 6.1 percent, to 3,426 tons, the exchange said today in a daily report. That's less than one day of global consumption. Tin stockpiles dropped 10 tons to 10,150 tons. There may have been a supply shortfall of about 30,000 tons last year due to lower production from Indonesia, the world's second-largest producer.
Nickel prices may rise to $50,000 a ton this year, said Martin Siegel, a fund manager at PEH Wertpapier AG who invests about 30 percent of his $39 million fund in nickel-related stocks. A ``technical correction'' is possible but won't affect the long-term gains, Siegel said today by phone from Oberursel, Germany.
Nickel's 14-day relative strength index, a technical chart used by traders to predict gains and declines in prices, was at 65.78 today. A reading above 70 usually signals prices are poised to drop.
Copper rose to the highest in more than a week. Chile's Codelco, the world's largest producer of the metal, halted production at the Radomiro Tomic mine this week. The mine accounts for 17 percent of the company's annual output.
Also on the LME, aluminum added $14 to $2,744 a ton, lead rose $25 to $1,875 and zinc increased $35 to $3,395. |
