Trading was mixed on the London Metal Exchange Tuesday with nickel climbing as inventories fall, but the market's focus remains on aluminium and how much metal may be delivered on warrant Wednesday, market participants said.
Speculative buying, declining stocks, and ongoing supply concerns continue to support nickel prices, said analysts.
Three-month nickel maintained its strength throughout the day, hitting a session high of $34,700 a metric ton before retreating to a PM close of $33,600/ton.
LME nickel stocks fell 270 metric tons to 5,406 tons, according to the exchange's data.
Ongoing negotiations between diversified miner Xstrata and union workers at its Canadian nickel operations in Sudbury also add to price strength, analysts said. The current labor contract expires Jan. 31.
Elsewhere, three-month copper gained over 1% to a PM close of $5,710/ton, triggered by a fall in LME stocks by 2,550 metric tons to 196,900 tons.
However, one base metals analyst said the focus of the market remains on aluminium and on watching how the current squeeze in the market plays out on the Wednesday prompt date for January.
"People will be really interested to see whether the metal is delivered onto warrant or rolled-forward," the analyst noted.
LME data shows one or more market participants holds more than 40% of the futures positions open on the January prompt date, which is Wednesday.
Otherwise, the markets were steady with a reasonable amount of volume seen, the base metals analyst added.
Three-month tin remained within its recent range between $10,250 and $10,750/ton.
In news, the Indonesian government said Tuesday it isn't reissuing operating licenses to small-scale private tin smelters at its main tin deposit, contrary to recent market talk.
Dozens of private tin smelters on Bangka island were shut down last year by the police and will remain that way for an unspecified period while the government investigates their legality, said Simon Sembiring, director general for mining at the Ministry of Energy and Mineral Resources.
Indonesia will also issue new regulations governing the mining sector in March, under which only mining companies currently operating under contract of work arrangements with the government will be allowed to export metal ore, Sembiring told reporters.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Monday PM kerb
Copper 5710.0-5715.0 Up 95
Lead 1582.0-1585.0 Dn 28
Zinc 3719.0-3720.0 Dn 61
Aluminium 2680.0-2681.0 Dn 5
Nickel 33600.0-33700.0 Up 400
Tin 10645.0-10650.0 Up 100
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