Nickel surged for the 11th straight day to the highest price since February 2013 on fears that global supplies could decline following Indonesia’s ban on shipments of unprocessed ore and as tensions between Ukraine and Russia went a notch higher.
Three-month delivery Nickel soared as high as 2.6% to $17,845 per metric ton on the London Metal Exchange. In Shanghai, the metal exchanged at $17,796 as of 3:32 pm. The Monday’s rise marks its longest rally since October 2010.
According to Castanet, Nickel has been advancing in price since Indonesia implemented a prohibition on exportation of raw ore to encourage foreign investments in local processing.
Indonesia’s ban that took effect in January and escalating conflict between Russia and Ukraine will send the metal’s prices higher.
“Chinese nickel pig iron producers will have to purchase some ore from the market while Indonesia keeps the policy unchanged,” said Heng Kun of Beijing-based Essence Securities Co.
Russia wants an emergency meeting of the UN Security Council following the killing of a Ukrainian soldier amid chaos in Slovyansk. Russia is being accused by the US and Ukrainian authorities of sponsoring the mayhem.
Nickel stockpiles tracked by the LME shrunk 0.7% to their lowest since March 19, standing at 276,936 tons on April 11. Trade figures indicated that the inventories are on course for their first one-month loss since June 2012, as Bloomberg reports.
In the meantime, Canadian bank Scotiabank increased its outlook for nickel’s price as a result of the Indonesian ban. The bank said on Monday in a report that after seeing no signs of Indonesia reversing the ban, the nickel market has begun to despair with prices going up drastically.
The lender said that it expected the metal to trade at $7.66 per pound on average this year. Price for 2015 will be $9, the bank said.
Nickel averaged $6.82 per pound last year. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com