Lead Rises to Record in London on Supply Concern; Nickel Drops
By Chanyaporn Chanjaroen
July 16 (Bloomberg) -- Lead rose to a record for a fourth session in London on expectations Ivernia Inc., producer of about 3 percent of the world's mined supply, will extend the suspension of exports from a port in Australia. Nickel and copper fell.
Ivernia's plan to ship product from the port of Fremantle, following the March 12 suspension at Esperance, was opposed by Fremantle's mayor. The metal, used in car batteries, has soared 62 percent since the suspension, ordered amid an investigation into lead poisoning at the port.
``Any news that is negative on the supply side will just add to pressures on the lead price,'' said David Moore, a commodities strategist at Commonwealth Bank of Australia in Sydney. ``The lead market is very tight at the moment.''
Lead for delivery in three months rose $90, or 3 percent, to $3,120 a ton as of 9:49 a.m. on the London Metal Exchange. The contract earlier climbed to $3,125 a ton, beating the record set on July 13 by $85.
Lead production will lag behind demand by 14,000 tons this year, a sixth consecutive year of supply shortfall, said Triland Metals Ltd., one of the 11 companies that trade on the LME floor. Calyon, the investment-banking unit of Credit Agricole SA, raised its price forecast for this year by 43 percent to an average $2,620 a ton, citing lower supply.
Toronto-based Ivernia intended to restart shipments from the Magellan mine through Fremantle by the end of this year or early 2008, the company said June 28.
Stockpiles tracked by the LME fell 450 tons, or 1.1 percent, to 41,575 tons, the exchange said today, bringing the decline in the past 12 months to 62 percent.
Nickel Declines
Nickel dropped for a third consecutive session, declining $250, or 0.8 percent, to $32,350 a ton because of falling usage by stainless-steel producers, the largest consumers. The contract lost 7.7 percent last week, a sixth weekly drop.
Posco, Asia's third-largest steelmaker, will reduce stainless-steel production by a total 50,000 tons this month and next, spokeswoman Ko Min Jin said today. Other producers in China and South Korea also said they will cut output this year.
Copper fell, erasing earlier gains, after stockpiles monitored by the LME gained for the first time in almost three weeks. Inventories rose 1,325 tons, or 1.4 percent, to 98,875 tons, the exchange said, the first increase since June 25.
The benchmark three-month contract dropped $20, or 0.3 percent, to $7,860 a ton, after rising to $7,910 a ton before the stockpile report.
Among other metals traded on the LME, aluminum advanced $12 to $2,804 a ton and tin was unchanged at $14,200. Zinc fell $25 to $3,565 a ton.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net ;
Last Updated: July 16, 2007 05:42 EDT
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