Nickel posts longest rally in 42 months on supply concern

LONDON: Nickel prices rose, capping the longest rally more than three years, as Indonesia’s ban on ore exports limits supplies, triggering forecasts for a global shortfall. The ban "alone is likely to shift the nickel market from structural oversupply to a balanced outcome this year, with sizable deficits probably over coming years," Societe Generale SA said in a report.

"Stronger global growth outlook is likely to drive nickel usage in stainless and nonstainless sectors."

The price rose to a 13-month high, while stockpiles monitored by the LME posted the biggest weekly drop since June 2012.

Tensions between Ukraine and Russia, the home to OAO GMK Norilsk Nickel, the world’s biggest producer of the refined metal, also may threaten shipments, Tom Price, a UBS commodity analyst in Sydney, said on Friday in a Bloomberg Television interview.

Nickel for delivery in three months climbed 1.9% on Friday to settle at $17,400 a tonne at 5:50 pm on the LME. Earlier, the metal reached $17,495, the highest since February 20, 2013. The price gained for the 10th straight day, the longest rally since October 6, 2010.

This year, nickel may top $19,000, Societe Generale said. The price has jumped 25% in 2014.