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Nickel Set for Biggest Quarterly Gain Since 2010

March 31 (Bloomberg) -- Nickel prices posted the biggest quarterly advance since 2010 amid concern that world supplies will be constrained.

The commodity, used to make stainless steel, has recorded the biggest gain this year of the six main metals traded in London. Indonesia, the leading global producer of mined nickel, barred exports of unprocessed ores in January. China, which imports nickel ore, has enough stockpiles for five months, according to a Bloomberg survey of smelters, miners, traders and analysts.

“The fundamentals are very supportive for nickel,” Bart Melek, an analyst at TD Securities in Toronto, said in a telephone interview. “Also, investors are betting that China’s demand will increase.”

Nickel for delivery in three months rose 1.2 percent to settle at $15,900 a metric ton at 5:50 p.m. on the London Metal Exchange. This quarter, the price increased 14 percent, the most since the three months ended September 2010.

Aluminum for delivery in three months climbed 1.5 percent to $1,785 a ton, the biggest gain in almost four weeks. In March, the price advanced 1.8 percent, the second straight gain, after slumping 13 percent last year.

Alcoa Inc., the largest U.S. producer, said on March 28 that it will curb capacity at two Brazilian smelters made uncompetitive by lower prices and rising costs.

“Aluminum seems underpinned by production cuts, though it will be interesting to see how widespread they become,” Michael Turek, a senior director at Newedge USA LLC in New York, said in an e-mail.

Copper fell 0.4 percent to $6,645 a ton ($3.01 a pound) on the LME. Futures for May delivery dropped 0.5 percent to $3.0255 a pound on the Comex in New York.

Zinc and lead gained in London, while tin dropped.

To contact the reporters on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net

To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net Patrick McKiernan, Joe Richter

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