Thu, Mar 15 2007 – Base metals were higher amid falling stocks in an already tight market, while sentiment was also boosted by a rebound in equity markets.
"Metals are much higher in early trade this morning as investor risk aversion fades, as implied by the strong bid tone in equity markets late New York," said Michael Jansen, JP Morgan metals strategist
Further, a strong Asian trading session helped set the agenda.
"It is a very bullish environment with strong price action out of the Shanghai Futures Exchange overnight spilling over into a very solid session thus far," added Jansen.
Nickel rose to yet another fresh new high of 46,300 usd, supported also by a large fall in inventories amid dwindling stocks.
Inventories of the metal stored in LME certified warehouses worldwide stood at 3,594 tonnes, down down 222 tonnes from yesterday.
LME nickel for 3 month delivery was up at 45,900 usd a tonne at 10.51 am against 44,800 usd at the close yesterday.
Most analysts agree further gains seem likely amid critically low stocks – which are less than a day's worth of global consumption.
TheBulliondesk.Com analyst, William Adams, however, warned that nickel is most vulnerable to a reversal in fortunes. "We feel nickel is running into trouble," he said.
Adams explained that if demand falls and supply from nickel in pig iron form displaces other forms of nickel, the supply gap may be smaller than forecast.
"When the market starts to turn, nickel is likely to fall very fast," he said.
Elsewhere, copper was also up at 6,450 usd against 6,220 usd, underpinned by China's strong industrial production and solid growth in Chinese copper imports.
Industrial production rose 18.5 pct in January and February compared with the same two months last year, said the National Bureau of Statistics.
Other base metals were up as the LME reported falls in stocks in a daily report, except from aluminium which benefited from a slight increase.
Zinc was up at 3,330 usd against 3,220 usd, tin rose to 13,850 usd against 13,500 usd, lead was up at 1,917 usd against 1,875 usd while aluminium was also up at 2,772 usd against 2,715 usd.
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