AP: Nickel rises on LME on speculation surplus is being curbed
Bloomberg reported that nickel rose for a third day in London on speculation production cuts are starting to curb a surplus of the metal used mostly in stainless steel. Aluminum climbed to the highest in two weeks.
As per report, supplies of nickel in warehouses monitored by the London Metal Exchange fell by 114 tonnes to 83,964 tonnes, narrowing this year's climb to 7.1%. Stockpiles are up by 47% for copper and 22% for aluminum over the same period. BHP Billiton Limited closed an Australian nickel mine last month after prices plunged.
Mr Daniel Smith analyst at Standard Chartered Plc in London said that "Inventories of nickel are not rising as sharply as the other metals, suggesting the supply demand balance for nickel has stabilized a bit. We are not looking for a huge surplus this year because supply has been cut back so sharply."
Nickel for delivery in three months gained USD 145 or 1.3% to USD 11,750 a tonne, paring a climb of as much as 3.8%. The contract has added 4.9% this week. Reductions in output are greater for nickel than any other metal, equal to almost 14% of last year’s production. Nickel supply will exceed demand by 50,000 tonnes in 2009.
Mr Michael Widmer analyst at BNP Paribas SA in London said that "Deliveries into LME inventories are set to subside. There is no need for those producers who cut to deliver any longer into warehouses."
