Nickel rose to the highest ever on the London Metal Exchange (LME) for the third consecutive day, reaching $50,000 a tonne, as supply of the metal dwindled. Lead advanced to a record for a second session. | |
| Inventories of nickel monitored by the exchange fell 312 tonne, or 6.1 per cent, to 4,812 tonne, the LME said today in a daily report. That's the biggest one-day drop since March 8, bringing the decline in the past year to 85 per cent. |
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| "Nickel inventories are very low, making the market very vulnerable to more upside,'' Sudakshina Unnikrishnan, a metals analyst at Barclays Capital, said today by phone. Barclays is among the 11 companies that trade on the LME floor. |
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| Nickel for delivery in three months gained $450, or 0.9 per cent, to $49,850 a tonne as of 9:25 am. Earlier, it traded at $50,000 a tonne, the highest ever. |
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| The metal, used in stainless steel, has risen 50 per cent this year, posting the largest gain among the seven industrial metals traded on the LME. Expanding demand from stainless steel producers has provided "a very strong environment'' for prices to rise, Unnikrishnan said. |
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| The so-called relative strength index of nickel rose to 71.25 today, signalling prices are due for a correction. The index is widely used by traders and investors as a gauge for changes in price direction. |
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| "Although further gains are possible, we suspect prices are unsustainably high in the case of copper and nickel and we would rather be sellers than buyers of both these metals at current levels,'' John Reade, head of metals strategy at UBS Investment Bank in London, said today in a daily report. |
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