Nickel eases from high as LME prices rise

Dec 01, 2006 | 11:32 AM | Bianca Markram, Meghann McDonnell

Nickel ended Friday's final kerb session on the London Metal Exchange on par with its previous day's final kerb close after hitting a record high of $34,300 per tonne earlier in the day on the back of concerns over supply.

Three-month nickel posted a final kerb price of $33,900/$33,950 per tonne (bid/ask), compared with Thursday's final kerb close of $33,945/$33,950 per tonne.

"The market is incredibly tight. This week we've seen (Inco Ltd.'s) Goro nickel project delay and BHP (Billiton's) Ravensthorpe delayed. This has made a big difference in the market and brought supply to a very tight situation," one analyst said Friday.

The market is bracing itself for a supply deficit as it expects an absence of new nickel production next year. "It's potentially 40,000 tonnes out of a 1.3-million-tonne market that was going to be there next year, but is now not going to be. We penciled a small deficit of 5,000 tonnes for 2007; that will now probably be higher and will continue in 2008," Robin Bhar, an analyst at UBS AG in London, said.....

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