Nickel Stockpile Orders Gain on Signs of Stronger Chinese Demand

Orders to remove nickel from London Metal Exchange stockpiles climbed to the highest level in almost two weeks on signs of stronger Chinese demand.

Canceled warrants, as the orders are known, rose 384 metric tons to 9,858 tons, the highest level since Aug. 30, exchange data showed today. Bookings jumped 28 percent, the most in a month, on Sept. 9. Canceled warrants in Rotterdam, which holds 76 percent of LME nickel stockpiles, increased to 6,408 tons, the highest level since April 12.

The gain can be attributed to higher Chinese import demand, Jim Lennon, global head of commodities research at Macquarie Group Ltd. in London, said by e-mail Sept. 9. Demand for refined nickel is “surging” because of a shortage of nickel pig iron, he said in a report dated today.

Nickel pig iron, usually a cheaper alternative to refined metal, is now more expensive, according to Macquarie.

“There are also reports that imports are surging due to a large Chinese trading company building nickel stocks ahead of the launch of a nickel exchange-traded fund in early 2012,” the bank said in the report.

Nickel inventories in LME warehouses advanced for the first day in seven after falling last week to the lowest level since March 2, 2009. Stockpiles of the metal, used to protect stainless steel from corrosion, are down 27 percent this year, heading for a second annual retreat.

Nickel for three-month delivery fell $270, or 1.3 percent, to $20,880 a ton by 1:07 p.m. on the LME as all of the six main metals traded on the exchange slid on concern Europe’s sovereign-debt crisis may worsen. Nickel is down 16 percent this year, leading declines among the six metals.

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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