THe cupboard is bare and that is what the analysts are...

THe cupboard is bare and that is what the analysts are saying.
Mincor should do very well today.

jojo


Nickel Rises to Record as London Metals Gain on Stockpile Drop

By Chanyaporn Chanjaroen

March 7 (Bloomberg) -- Nickel climbed to a record, leading gains on the London Metal Exchange, after inventories dropped for the first day in six. Tin posted the largest intraday gain in nearly four weeks. Copper also rose.

Stockpiles of all seven LME-traded metals declined today, easing concern that slower economic growth in the U.S. and China will hurt demand for raw materials. U.S. Treasury Secretary Henry Paulson said today in Seoul global economic growth is ``solid'' and played down investor concern that has wiped $3.3 trillion from world stock-market valuations in six days.

``The main driver in metals at the moment is inventory outflows, which are taking place across the board and in all geographic areas,'' Kevin Norrish, an analyst with Barclays Capital in London, said today by phone. ``This shows physical demand is strong enough to outstrip current supply.''

Nickel for delivery in three months on the LME gained $1,600, or 4 percent, to $42,000 a ton as of 4:11 p.m. in London. It earlier traded at $42,330 a ton, beating the high set March 1 by $130. Tin jumped as much as $450, or 3.4 percent, to $13,750 a ton, the largest intraday gain since Feb. 15. Copper gained as much as 2.8 percent to $6,150 a ton.

The LME index tracking six base metals fell 4 percent last week, dragged down by the worldwide equity-market slump. The declines were ``an aberration,'' Norrish said.

Nickel has more than doubled in the past year as demand from China, the world's largest user, expanded. Consumers have tapped stockpiles to plug a gap in production last year that Xstrata Plc, the world's fourth-largest nickel producer, estimated was 34,000 tons.

Stockpiles Drop

Stockpiles monitored by the LME dropped 4.3 percent to 3,648 metric tons, the LME said today in a daily report. That's less than two days of global consumption. The metal is mostly used to make stainless steel.

``The cupboard is bare,'' Nick Moore, a metals analyst at ABN Amro Holding NV in London, said in a telephone interview. Nickel is ``immune'' to declines of the magnitude metals such as copper and zinc have registered in the past year, he added.

Tin rose after Indonesia, the world's second-largest producer of the metal, said it may impose a quota on exports to keep prices above $12,000.

The proposal would keep the global market from being oversupplied, Mangantar Marpaung, the director for coal and geothermal development at the energy and mineral resources ministry, said in Jakarta today. The nation is trying to curb illegal tin mining. China is the largest producer of the metal.

`Distort' Market

A price of more than $12,000 may ``distort market fundamentals'' and lead to new sources of supply being brought into production in other parts of the world, Neil Buxton, managing director of GFMS Metals Consulting Ltd., said in an interview.

Copper gained after Codelco, the world's biggest copper producer, said yesterday that an electrical fire on March 2 halted output at a mine in northern Chile that accounts for about 17 percent of its annual production. The company said no one was injured.

Codelco, which is owned by the Chilean government, expects to ``gradually'' return to full production at its Radomiro Tomic mine during the next 15 days as equipment is repaired, it said in a statement on its Web site.

A shortage of aluminum on the LME is easing. Buyers of aluminum for immediate delivery paid $3 more than the benchmark three-month price, the smallest difference since Dec. 7, according to LME data. In a market with adequate supply, buyers typically pay less for metal for immediate delivery than longer- dated contracts.

Still, aluminum gained $24, or 0.9 percent, to $2,718 a ton. Among other metals traded on the LME, lead rose $30 to $1,850 and zinc increased $40 to $3,350.

To contact the reporter on this story: Chanyaporn Chanjaroen in London at

Last Updated: March 7, 2007 11:32 EST