Tags: Nickel | Bull | Market | Ukraine

Nickel Nears Bull Market as Ukraine Crisis Raises Supply Concerns

Monday, 17 Mar 2014 04:13 PM

The price of nickel rose Monday, nearing a bull market, as speculation that trade sanctions will be imposed against Russia fueled supply concerns amid signs of rising demand from China.

European Union foreign ministers agreed to freeze assets and impose visa travel bans on 21 people amid the worst diplomatic standoff since the Cold War after a referendum paved the way for President Vladimir Putin to annex the Ukrainian region of Crimea. China, the world’s largest consumer of industrial metals, plans to invest more than 1 trillion yuan ($162 billion) in a redevelopment plan to aid growth.

Prices have climbed 14 percent this year after Indonesia, the biggest producer of mined nickel, banned ore exports, and tension escalated between Russia and Ukraine. OAO GMK Norilsk Nickel, Russia’s largest mining company, accounts for 17 percent of world output, according to Morgan Stanley. The global surplus will narrow to 68,000 metric tons this year, from 207,000 tons in 2013, Barclays Plc forecast on Feb. 12.

“There’s still that concern about Indonesian supply and certainly, we are still worried that there could be sanctions against Russia that could impact exports from Norilsk,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “An even bigger factor here is the idea that came from China that they will urbanize.”

Nickel for delivery in three months gained 0.9 percent to settle at $15,880 a ton at 5:50 p.m. on the London Metal Exchange. A close of $15,942 would leave prices 20 percent higher than a November settlement low of $13,285, meeting the common definition of a bull market.

China will build more transportation links and let local governments directly issue bonds as part of a plan to redevelop shantytowns, the state broadcaster reported yesterday, citing the housing ministry. The Asian country is the largest producer of refined nickel, followed by Russia.

Copper for delivery in three months gained 0.2 percent to $6,480 a ton ($2.94 a pound) in London. Aluminum and zinc retreated on the LME, while lead and tin rose.

In New York, copper futures for delivery in May gained 0.1 percent to $2.952 a pound on the Comex.

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The price of nickel rose Monday, nearing a bull market, as speculation that trade sanctions will be imposed against Russia fueled supply concerns amid signs of rising demand from China.
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2014-13-17
Monday, 17 Mar 2014 04:13 PM
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