Nickel hits 10-yr high at Rs 1800

The metal has been rising on the LME following a huge decline in inventory.

Tracking the global spike, nickel prices touched a 10-year high of Rs 1,800 per kg, a gain of 10 per cent in the last eight days, in the Mumbai non-ferrous metals market. Nickel prices have been rising overseas following a huge decline in inventory.

Today, the silvery white metal rose Rs 50 a kg or 2.86 per cent over its previous close of Rs 1,750 per kg to Rs 1800 per kg.

Domestic prices have moved in tandem with the movement of nickel on the London Metal Exchange (LME) where the price has gone up by 3.76 per cent or $1105 to $30,455 on September 26, the highest-ever compared with $29,350 during the same period under comparison.

Inventories at LME-registered warehouses have fallen by 714 metric tonne to 5,724 tonne, representing about last eight days of market consumption and raising concerns about supply in an increasingly tight market.

On the National Commodity and Derivatives Exchange, the September contract was quoting at Rs 1,402 on Tuesday, up 4 per cent in the last eight trading sessions, while the October and November contracts rose 3.98 per cent and 3.99 per cent, respectively, during the same period.

Prices of steel, which uses nickel as a key input, have also started improving over the last few days on fresh orders. This, in turn, will boost nickel prices as steel producers buy more of this metal.

Nickel for delivery in three months on the LME jumped $650, or 2.4 percent, to $28,300 a tonne. It has more than doubled this year and traded at $29,950 on August 22, the highest since 1987, sources said.

The metal has soared amid expanding production of stainless steel in China, the world's largest producer.

Global stainless steel output jumped 6.5 per cent to 13.9 million tonne in the first half. Output from China, the largest producer, soared 44 per cent to 2.3 million tonne. Global nickel use will grow 9.5 per cent to 1.35 million tonne in 2006, beating output by 25,000 tonne.