Nickel Reaches 9-Week High as Export-Ban Prospect Spurs Buying – by Joe Richter (Bloomberg News – October 22, 2013)

Nickel jumped to a nine-week high in London as investors purchased the metal to close out bets on mounting concern that ore exports will be halted next year from Indonesia, the world’s largest producer.

A government ban on shipments from Indonesia of ores including bauxite, used to make aluminum, and nickel may take effect next year to aid local processing. Nickel got a boost from investors who bought the metal to liquidate bets on lower prices, according to Citigroup Inc. Prices have tumbled 13 percent this year, the most among the six main metals traded on the London Metal Exchange.

There is “growing nervousness about a potential export ban on Indonesian ores that kicks in at the beginning of the new year,” Edward Meir, an analyst at INTL FCStone in New York, said in a report.

Nickel for delivery in three months climbed 3.4 percent to settle at $14,850 a metric ton at 5:51 p.m. local time on the LME. Prices reached $14,880, the highest since Aug. 19.

The metal slumped this year as stockpiles tracked by the LME expanded to a record, reaching 231,480 tons today, according to daily exchange data. Open interest, or the number of futures outstanding, fell 4.9 percent last week from a record on Oct. 11.

The fee to borrow nickel for a day on the LME reached $12 a ton today, the highest since Nov. 30, 2011.

Citigroup said yesterday that prices may rally above $17,000 in the first quarter.

Payrolls in the U.S. climbed less than projected in September, a government report showed today, indicating the economy had little momentum leading up to the federal government shutdown that ended last week. Progress in reducing unemployment is among criteria weighed by the Federal Reserve in deciding whether to slow economic stimulus.

Copper for delivery in three months rose 1.2 percent to $7,332 a ton ($3.33 a pound) in London. Aluminum, zinc, lead and tin also advanced.

In New York, copper futures for delivery in December added 1 percent to close at $3.3355 a pound on the Comex.

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