SYDNEY: London nickel hovered close to 15-month highs on Wednesday, supported by rising prices for nickel ore as Chinese nickel pig iron producers run down their stockpiles after Indonesia banned exports in January. Prices for nickel ore in China have surged this year after Indonesia banned shipments of the raw material which is used to make nickel pig iron (NPI) - a substitute for refined nickel in the country's giant stainless steel industry. Some stainless steel makers are now turning back to refined nickel and scrap metal as feed for their production, said Peter Peng of consultancy CRU in Beijing. "NPI production started to drop in April as some of the largest producers also cut back production because their laterite ore stocks decreased greatly," he said. "Some plants had stocked (a total of) about 2 or 3 million tonnes early this year, but less than 1 million tonnes (is) left in their warehouses," he said. Prices for 1.8 per cent laterite ore have soared to $100 per tonne on a cost insurance and freight (CIF) basis from $65 a tonne in mid March, CRU estimates. Three-month nickel on the London Metal Exchange had climbed 0.1 per cent to $18,574 a tonne by 0705 GMT. It earlier hit $18,700 a tonne - within a whisker of its April 28 peak of $18,715, the loftiest since February 2013. LME nickel prices have rallied by a third this year on worries about Indonesian supply and also on concerns that shipments from top producer Norilsk Nickel could be hit by sanctions over Russia's actions over Ukraine. Ukraine has experienced its deadliest week since a separatist uprising began, leaving less room for peace efforts and depressing appetite for risk.. German industry orders fell 2.8 per cent in March from the previous month, the biggest drop in 1-1/2 years as demand for German capital and consumer goods from the eurozone slumped due partly to worries about the Ukraine crisis, data showed on Wednesday. Also souring sentiment was an increasingly cloudy outlook for the world's second-largest economy as expansion in China's services industry slowed slightly in April, with employment growth slipping to a seven-month low. In other metals, LME copper sagged 0.8 per cent to $6,666.50 a tonne from the previous session when it finished little changed. The most-traded August copper contract on the Shanghai Futures Exchange fell 0.5 per cent to 46,910 yuan ($7,500) a tonne. China's central bank said on Tuesday it would keep monetary policy steady with timely fine-tuning to help stabilise economic growth, while introducing greater yuan flexibility. Meanwhile, CME Group Inc's new US aluminium futures contract debuted on Tuesday with just 57 lots of metal changing hands as the Chicago-based exchange launched its audacious bid to challenge the London Metal Exchange's $51 billion market.

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