The bigger story:
Nickel gains most in one week after demand outpaces supplies
Source: Bloomberg
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Nickel Board
Nickel CatalogNickel gained most in one week as demand for the metal used in stainless-steel production has outpaced supplies, creating a shortfall.
Demand will increase more than 5 percent this year, John Meyer, a London-based analyst at Numis Securities Ltd. said today in an interview. Rising consumption has reduced stockpiles of the metal tracked by the London Metal Exchange by 63 percent in the past year.
"We've seen a drop in the LME stockpiles, which are still very tight," Robin Bhar, a London-based metals analyst at UBS Ltd., said today by telephone.
Prices of nickel for delivery in three months on the LME gained $495, or 1.6 percent, to $30,800 a ton as of 10:27 a.m. local time. That's the largest one-day gain since Nov. 2. The contract has more than doubled in the past year, trading at $32,625 a ton on Oct. 20, the highest since at least 1987.
Global production of high-nickel-content stainless steel increased more than 13 percent in the first nine months of this year, Eramet SA, a French producer, said on Nov. 3. The nickel- supply shortfall will be 40,000 tons this year, according to Societe Generale.
The LME's plan to lift three-month-old restrictions on nickel trading had no impacts on prices, Bhar and Randy North, a trader at RBC Capital Markets said. The 129-year-old exchange said today that the restrictions that limit the borrowing cost of nickel to $300 per ton per day will cease on Nov. 13.
Nickel stockpiles in warehouses monitored by the exchange fell to 4,128 tons on July 31, the lowest since 1991. They stood at 7,362 tons today, according to the LME.
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