Nickel rises on supply delays

Nickel rose on the London Metal Exchange on speculation dwindling stockpiles and supply disruptions will create a shortage of the metal.

Inventories tracked by the LME fell by 240 tons to 5,676 tons, the exchange said in a daily report today.

LME-monitored stockpiles have slid 82 percent in the past 12 months while delays to nickel projects proposed by BHP Billiton and Cia Vale do Rio Doce, the world's largest and second-largest mining companies respectively, have exacerbated shortages.

"Those supply concerns will remain this year and into 2008,'' said Roy Carson, a London-based analyst at Triland Metals Ltd, one of 11 companies authorized to trade on the LME's floor. ``How much that continues to affect the price will depend on demand.''

Nickel for delivery in three months on the LME increased $605, or 1.9 percent, to $33,050 a metric ton as of 9:20 a.m. in London. The metal dropped 3.2 percent at the end of last week.

Nickel, which is used in stainless steel, more than doubled last year and traded at a record $34,950 on December 15.

BHP said on Nov. 30 that its Ravensthorpe nickel project in Australia would be delayed by as much as a year as costs increased 64 percent.

Vale was ordered by a French court on November 24 to stop construction at its $2.15 billion Goro mine on the Pacific island of New Caledonia until it received administrative licenses.