Nickel climbs over $27,600 in LME officials

Nickel reached fresh highs in Tuesday’s official trading on the London Metal Exchange, boosted by the activities of black-box algorithmic traders and improving fundamentals.

Three-month Nickel settled at a record price of $27,675/680, up over $350 from its opening price of $27,310.
“I have seen people talk as high as $37,000 if this momentum is maintained,” a cat I trader said.

“The market is very technically driven right now because of the sheer weight of investment money that continues to pour in to a comparatively small market,” the trader said. “It is the tail wagging the dog.”

But LME stocks are continuing to draw down and sellers have reluctantly withdrawn from the market because they believe there is more upside work to be done, the trader added.

China is continuing to import more refined nickel as there is a slowing down in the production of nickel pig iron, the trader said.

Primary nickel imports into China are likely to increase 42% year on year to more than 280,000 tonnes in 2011 because of a rise in output of stainless steel, Macquarie Bank said.

Nickel stocks in LME-approved warehouses rose by 402 tonnes overnight taking total stocks to 134,442 tonnes.
The alloying metal reached an intraday high of $27,864 per tonne and a low of $27,310.

Three-month copper broke through $9,800 in the officials to settle at $9,809/10 per tonne, up from its opening price of $9,775 per tonne.

“We are now a hop, skip and a jump away from the $10,000 mark,” the cat I trader said. “There are very few sellers out there and it would not take much to move the market”.

But the fund community would have to push the price, not traders, the trader said.

Copper stocks in LME-bonded warehouses fell 100 tonnes overnight to a total of 393,925 tonnes.
The red metal traded as high as $9,878 per tonne and as low as $9,769.75 per tonne in the early session.

Tin prices fell slightly to $29,875/900 per tonne in the officials, compared with its opening price of $30,400.
The contract traded as low as $29,800 per tonne and as high as $30,400.

A delivery into Singapore saw tin stocks in LME warehouses increase by 220 tonnes to reach a total of 17,835 tonnes.