Nickel Caps Biggest Monthly Gain in Year on Tight Supply

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NickelNickel capped the biggest monthly gain in more than a year amid speculation that supplies will tighten asIndonesia, the world’s top exporter, maintains a ban on ore shipments.

Offers for Philippine nickel ore rose in northern China, a sign shipments from Indonesia are “indeed tight,” Marex Spectron Group said in a note today. Canceled warrants, or orders to remove the stockpiles from warehouses monitored by the London Metal Exchange, climbed to an all-time high of 124,692 metric tons and are up 27 percent this year.

“Supplies are anticipated to remain light,” Michael Turek, a senior director at Newedge Group SA in New York, said in an e-mail. “Nickel is being driven higher by a combination of fundamental and technical drivers.”

Nickel for delivery in three months advanced 1.9 percent to settle at $14,720 a ton at 5:50 p.m. on the LME. The metal has risen 5.3 percent this month, the biggest increase since January 2013.

Indonesia barred exports of unprocessed ore as of Jan. 12. China was the largest buyer.

Nickel for immediate delivery traded near the narrowest discount in 19 months to the contract for delivery in three months, a sign of limited supply.

Copper for delivery in three months fell 0.2 percent to $7,010 a ton ($3.18) on the LME, capping a 0.8 percent slump in February, the second straight monthly decline.

On the Comex in New York, copper futures for delivery in May lost 0.4 percent to close at $3.1875 a pound, dropping for an eighth straight session.

Aluminum fell in London, leaving prices up 2.8 percent for February, the biggest monthly advance since November 2012. Tin and lead dropped today, while zinc gained.