Nickel has closed at is highest price in almost a year on the London Metal Exchange (LME), after moving into a bull market amid persistent concerns over supply of the metal to the market.
The LME’s three-month nickel contract was up two per cent at $US16,190 a metric ton at the PM kerb close on Tuesday, its highest settlement since April 11 last year.
The metal earlier hit an intraday peak at $US16,235 a ton. This represents a gain of more than 20 per cent since its January 9 low of $US13,334 a ton, the definition of a bull market.
Nickel prices have been driven by restricted supply from Indonesia, which has banned exports of ore. Concerns that Crimea-related sanctions on Russia could disrupt exports of its metal have also propped up prices. Along with the Philippines, Russia and Indonesia are the world’s biggest producers of the metal that is used in the production of stainless steel.
While the US and Europe have so far imposed sanctions only on individuals, “players on the nickel market still appear to assume that the Crimean crisis will escalate and that further-reaching sanctions will be imposed,” said analysts at Commerzbank.
Nickel’s break above $US16,000 a ton on Tuesday sparked technically-driven buying, as stop-loss orders — automatic orders to buy at a certain level — were triggered, said Standard Bank analyst Leon Westgate.
“Nickel’s break above $US16,000 today should, therefore, see prices run higher. However, prices have moved a long way and it may need further fresh buying interest to give it a necessary shove,” he said.
LME three-month copper closed 0.04 per cent higher at $us6,482 a ton Tuesday.