Nickel headed for longest rally in a month amid supply concerns
Bloomberg reported that nickel headed for the longest rally in a month in London amid concern that supplies will lag behind demand this year as an export ban in Indonesia crimps ore shipments.
Ms Gayle Berry, a strategist at Jefferies Group LLC, said that “Costs of nickel-pig iron, a lower-grade alternative to refined metal, are rising and pipeline inventories are low so there is potential for restocking.”
She forecast a deficit of about 40,000 tonne after a 45,000 tonne surplus in 2014. In the second half of last year, nickel dropped 20% on signs of slowing demand in China and Europe.
Mr Edward Meir, an analyst at INTL FCStone in New York, said that “The supply condition is a concern and some buyers are back after the big drop in prices. While we may not see a big rally, we could definitely see some support at these levels.”
Nickel for delivery in three months rose 1.4% to USD 15,475 a tonne on the London Metal Exchange. Earlier, the price reached USD 15,567, the highest since December 24th. The metal headed for a third straight gain, the longest run since December 4th.
Ms Berry said that “We think current nickel prices offer a buying opportunity and favor building length on dips below USD 16,000 a tonne in 2015.”
Copper for delivery in three months dropped 0.2% to USD 6,135.25 a tonne. Earlier, prices fell to USD 6,091.50, the lowest since June 2010.
Zinc, tin and lead declined in London. Aluminum slid for a 12th straight session, the longest slump since mid-2013.
In New York, copper futures for March delivery dropped 0.1% to USD 2.7655 a pound.
Source - Bloomberg