RE: RMMI headlines like this might attract some interest to RMMI as they are getting into a hot commodity play
LONDON (AFX) - Nickel prices surged to a new all-time high as the market remained concerned about critically low stocks, rising demand and possible supply disruptions.
At 1.47 pm, LME nickel for three-month delivery was quoted at 36,650 usd a tonne, after earlier hitting 37,349 usd a tonne -- its highest ever level.
'Nickel is seemingly immune from what is happening in the rest of the commodity complex, as it barrels on to new highs on the back of steady stainless (steel) demand and tight stocks,' said Man Financial analyst Ed Meir.
The LME said in a daily report earlier nickel stocks held in its warehouses have fallen by another 126 tonnes to total 5,052 tonnes -- equivalent to just over a day of global consumption.
'While demand for stainless steel is projected to remain solid in 2007, global nickel supplies are lingering at precariously, dangerously low levels,' said Deutsche Bank analyst Peter Richardson.
Demand for nickel is principally linked to the production of stainless steel, which makes up around 62 pct of nickel usage worldwide.
Demand aside, analysts said nickel continues to be plagued by worries over possible strike action at Xstrata's Sudbury mine in Ontario.
Workers at the mine have put forward a strike mandate before their union leaders, while pay talks with the company continue.
'With stocks very low and other supply concerns to the fore, a short squeeze up to 40,000 usd a tonne should not be ruled out,' said UBS Investment Bank analyst Robin Bhar.
Nickel prices have soared 180 pct since the start of 2006.
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