LONDON--Nickel futures soared to their highest levels in over
two years Thursday after reports of a supply stoppage at a
processing plant and mine added to traders' concerns over
supply.
The LME's flagship three-month nickel contract rose 6.1% to
$19,786 a metric ton in early trade -- its highest price since
March 2012.
Vale SA (VALE) suspended production at its Goro nickel
processing plant and mine in New Caledonia due to an effluent
spill, according to reports Thursday. The mining giant, which is
the world's No. 2 nickel producer, is reportedly waiting to hear
from the local government about when it can resume operations at
the plant.
While the Vale stoppage alone won't move the needle much in
terms of supply -- Goro's annual capacity of 60,000 tons barely
eats into Bank of America Merrill Lynch projections for 2014 global
production of 2.035 million tons -- the news added to
already-heightened concerns over supply of the metal amid an ore
export ban in top nickel producer, Indonesia.
"We are in a bull mode, so any outage is exaggerating the move"
higher said Rob Montefusco, a senior commodities broker at Sucden
Financial. "It's a tough call but $20,000 a ton looks quite
achievable."
Most other base metals were higher on the day Thursday, boosted
by some upbeat trade data from top metals consumer, China. Copper
was up 0.1% at $6,663.75 a ton, zinc was up 0.3% at $2,035.75 a
ton, lead was up 0.2% at $2,084 a ton and tin was 0.4% higher at
$23,190 a ton. Only aluminum was down, by 0.3% at $1,764.50 a
ton.
Write to Francesca Freeman at francesca.freeman@wsj.com
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