London Metal Exchange nickel prices jumped Wednesday as market participants nervously await fresh developments at Xstrata PLC's Sudbury operations in Canada hours before a strike is scheduled.
Nickel prices rose over 3% from Tuesday to a PM kerb of $36,950/ton.
A further drawdown in nickel stocks by 306 metric tons to 3,972 tons Wednesday was also supportive to prices. And with canceled warrants at 1,542 tons, this leaves just 2,430 tons available to the market, amounting to less than one day's global consumption.
The Sudbury operations account for about 4% to 5% of global nickel supply, analysts say.
If a new labor agreement isn't reached there before the current contract expires late Wednesday, the unionized workers will go on strike.
In other metals, three-month copper also rose roughly 1.5% from Tuesday to a PM kerb of $5,735/ton.
Despite an increase in copper stocks by 1,425 tons to 211,825 tons Wednesday, price strength came in part from a strike vote by workers at BHP Billiton Ltd.'s Cerro Colorado copper mine in Chile.
If Cerro Colorado seeks mediation and talks fall through, the strike would begin Feb. 7. The Cerro Colorado union negotiating the contracts represents about 535 of a total of 700 workers. Current contracts expire Wednesday.
Meanwhile, speculative buying supported both aluminium and zinc prices, which rose 1% and 2% respectively from Tuesday.
The tin market continues to watch closely the uncertain supply situation in Indonesia – the world's largest tin producer – following the closure of numerous independent smelters in October. Tin prices consolidated Wednesday, falling roughly 0.5% from Tuesday to a PM kerb of $12,000/ton.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 5735.0-5735.5 Up 96
Lead 1678.5-1679.0 Up 20.5
Zinc 3479.0-3480.0 Up 89
Aluminium 2729.0-2730.0 Up 34
Nickel 36950.0-37000.0 Up 1250
Tin 12000.0-12050.0 Dn 55
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