LONDON: Nickel hit a six-week high on Friday as markets braced for news of more Philippine mine suspensions next week amid a crackdown on environmental lapses in the world’s biggest nickel ore supplier.
A dozen more Philippine mines, mostly nickel projects, are in danger of being suspended when the government announces the results of its audit next Tuesday.
The Philippines has already halted the operations of 10 mines, eight of them nickel producers, since it launched an audit in July.
“There’s a massive risk in this market. There really isn’t another country that can step into the gap if a substantial amount of Philippine material is taken out,” said Macquarie analyst Vivienne Lloyd.
The Philippines accounts for more than 90 percent of China’s nickel ore imports.
Nickel on the London Metal Exchange was last bid up 0.3 percent to $10,690 a ton in official midday rings, having earlier hit a six-week high of $10,715. Prices are on course for an 9.5 percent weekly gain, the biggest since July.
Data on Thursday showed China’s nickel ore imports in August climbed to a 13-month high of 4.3 million tons, as traders stock up in anticipation of a supply crunch.
“The market probably hasn’t placed enough importance on the Philippines. That in combination with the much better than expected (Chinese) economic data has been the real driver of prices,” said analyst Daniel Hynes of ANZ in Sydney.
The nickel smelting industry in Indonesia, however, fears prices could tumble as the government considers a policy revision that could allow nickel ore and bauxite shipments to resume.
LME copper traded down 0.3 percent in rings at $4,842 a ton, but was on course for a 1 percent gain on the week.
The metal, widely used in construction and electronics, rose more than 3 percent last week, its biggest weekly gain in two months, after Chinese economic data indicated a firmer tone to the housing market and a revival in factory activity.
Premiums for Shanghai copper have climbed to the highest since May at $55-65, as industrial activity ramps up after summer.
Aluminium was last bid up 0.6 percent in rings at $1,642 a ton, having earlier hit a month high of $1,652.50, with volumes extremely high at above 12,000 lots. Broker Marex Spectron said it has seen strong demand for aluminum from speculators. Tin traded up 0.7 percent at $19,630 a ton. LME data showed on warrant or available tin stocks tumbled 38 percent to 1,860 tons, their lowest levels according to Reuters data which goes back to 1999.
Zinc was last bid down 0.5 percent at $2,283 a ton while lead was last bid down 1.3 percent at $1,923 a ton.
Nickel hits six-week high on Philippine supply risks
Nickel hits six-week high on Philippine supply risks
