Nickel, Lead Rise to Records on Export Disruption Speculation
By Chanyaporn Chanjaroen and Brett Foley
May 4 (Bloomberg) -- Nickel advanced to a record in London on speculation measures taken by the state government of Western Australia to detect pollution will disrupt shipments of the metal. Lead also rose to its highest ever.
A 20,500 metric-ton shipment of nickel concentrate from LionOre Mining International Ltd. and Jubilee Mines NL, scheduled to leave Australia's Esperance Port tomorrow, will be monitored. Western Australia state's Department of Environment and Conservation said today it will stop the ship loading should odor or dust be detected. Concentrate is shipped to smelters.
Lead shipments from Ivernia Inc.'s Magellan mine, which supplies about 3 percent of global output, have been halted since March due to an investigation in to lead poisoning at Esperance.
``When markets are as finely balanced as they are at the moment any piece of news on a possible disruption can have a big impact,'' Alex Heath, who heads metals trading at RBC Capital Markets in London, said in an interview.
Nickel for delivery in three months on the London Metal Exchange climbed $300, or 0.6 percent, to $50,100 a ton as of 11:13 a.m. local time, taking this week's gain to 3.3 percent. Earlier, it rose to $50,700 a ton, beating the previous record set April 24 by $500.
Nickel, used in stainless steel, has more than doubled in the past year. Demand from China, the world's biggest user, and delays to new projects have also helped push prices higher.
Inventories monitored by the LME fell for a fifth consecutive day, dropping 6 tons to 4,716 tons. Stockpiles have slumped 81 percent in the past year to less than two days of global consumption.
`Considerable' Consumption Growth
Record nickel prices have encouraged miners to increase production. PT International Nickel Indonesia, the nation's largest producer of the metal, said today that first-quarter output rose 3.6 percent to 17.980 tons. The company, a unit of Brazil's Cia. Vale do Rio Doce, said it expects to produce 160 million to 165 million pounds (70,307 tons to 74,843 tons) of nickel in matte this year.
``Consumption is growing considerably, there is practically no idle capacity, supply reaction is slow and inventories are at very low levels,'' Rio de Janiero-based Vale said yesterday in an e-mailed statement accompanying its first- quarter results. Vale is the world's second-largest nickel refiner after OAO GMK Norilsk Nickel.
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