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Thursday February 22, 4:41 AMNickel hits highs above $40,000 before easingLONDON, Feb 21 (Reuters) - London Metal Exchange nickel traded above the key psychological level of $40,000 per tonne on Wednesday as tight warehouse supplies dwindled further, but prices eased before the close.Tin also set a new high, while other metals finished firmer. "For the moment it (the market) is extremely tight and no one wants to short nickel right now," analyst Jon Bergtheil at JP Morgan said. Nickel for delivery in three months hit a fresh high of $40,250 before closing at $39,500, down $400 from Tuesday's last trade. "The market is very nervous -- many prefer to step aside when the price is just looking to go higher, making the market even more volatile," an LME floor trader said. The price has risen by 20 percent since the start of the year on top of gains of 150 percent in 2006. "Nickel has broken $40,000 and nothing has changed -- there is a very severe shortage of nickel," another LME trader said. Analyst Michael Widmer at Calyon said in a report nickel consumption would remain high and limited supply was coming through, so prices should remain well above their historic average. However, prices might correct from current highs towards the end of the first quarter due to a deceleration in the growth rate of stainless steel output, Widmer said. Stainless demand accounts for about two-thirds of total nickel offtake. Available nickel stocks in LME warehouses fell to 2,064 tonnes, or just over half a day of world consumption. Volumes were thin as the Shanghai Futures Exchange is closed for Lunar New Year from February 17, re-opening on February 26. TIN AT RECORD Tin hit a new high of $13,900 before closing at $13,850, up $450. The market is awaiting a deadline this week in Indonesia, where smelters have to verify the source of their ore and the purity of their refined tin to secure an export permit. Lead was quoted at $1,825/1,826, level with its previous close. It touched a record $1,840 on Tuesday. Aluminium was up $13 to $2,758. LME stocks rose to their highest since March 2006 at 779,700 tonnes, up by 12 percent since the start of the year. Recent market tightness was easing, with the cash premium over three-months prices at around $20, down from $52 on Tuesday and $118 on February 5. "There is really no shortage of aluminium and there is no shortage of its raw material alumina," Bergtheil said. Aluminium touched a record high of $3,310 in May 2006. Copper was $60 higher at $5,790. At this level, copper was 34 percent below its peak of $8,800 on May 11. In New York, copper for March delivery settled up 6.85 cents, or 2.6 percent, at $2.6545 a lb on the New York Mercantile Exchange's COMEX division, near the upper end of its session range between $2.5640 and $2.6570. Zinc closed up $35 at $3,360. (Additional reporting by Chris Kelly in New York) |
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