METALS-Nickel firm on unrest at New Caledonia mine

  • Wednesday, May 28, 2014
  • Source:ferro-alloys.com

  • Keywords:Nickel New Caledonia mine
[Fellow]Nickel was underpinned on Tuesday after rioting at a Vale mine in New Caledonia intensified worries over supply shortages, while copper hit its highest level in nearly three months on demand recovery hopes.

LONDON, May 27 (Reuters) - Nickel was underpinned on Tuesday after rioting at a Vale mine in New Caledonia intensified worries over supply shortages, while copper hit its highest level in nearly three months on demand recovery hopes.

Three-month nickel on the London Metal Exchange rose 0.82 percent to a session high of $19,761 a tonne before paring gains to end at $19,550 a tonne, down 0.3 percent.

Prices strengthened after rioters torched vehicles, equipment and buildings at the $6 billion plant at Goro in southern New Caledonia, which closed this month after the leak of 100,000 litres of acid-tainted effluent.

The unrest was expected to push back the reopening of Vale's plant, which had been expected to be back in operation fairly quickly after the leak.

"It makes it more likely that the closure of the plant will last a bit longer," said Stephen Briggs, a metals strategist at BNP Paribas in London.

"In itself, that is not the big story, which is still Indonesia. But because it's happening at a time when everybody perceives we're going to be moving into deficit, it begins to matter a bit more."

The Vale plant had been expected to produce about 40,000 tonnes of nickel this year, out of a global supply of around 2 million tonnes.

The nickel price has soared by more than 40 percent so far this year after top exporter Indonesia imposed a ban on unprocessed ore shipments.

  • [Editor:Juan]

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