Nickel Rises to Two-Year High as New Caledonia Site ShutsLuzi Ann Javier and Agnieszka Troszkiewicz
Nickel surged to two-year high as global supply concerns mounted following a plant closure in New Caledonia by Vale SA, the world’s second-biggest producer.
In the South Pacific nation, processing operations stopped after a spill of “acid-containing solution,” a small amount of which entered a nearby creek, Cory McPhee, a Vale spokesman in Toronto, said today in an e-mail. The water quality in the creek is back to normal and Vale expects to “resume production ‘‘shortly,’’ he said, without citing a date.
Vale, based in Rio De Janeiro, said in November that it planned to produce 40,000 metric tons this year at the New Caledonia site, formerly known as Goro. Nickel prices jumped 40 percent this year after ore shipments were banned by Indonesia, the top miner. The global market will swing to a deficit in the second half of 2014, Macquarie Group Ltd. said last month.
‘‘The market is already very concerned about supply, mostly because of Indonesia’s export ban,’’ Patricia Mohr, a commodity market specialist at Scotiabank in Toronto, said in a telephone interview. The Vale accident ‘‘‘will just add to supply worries,’’ she said.
Nickel for delivery in three months soared 4.1 percent to settle at $19,405 a ton at 5:50 p.m. on the London Metal Exchange, the biggest gain since Sept. 14, 2012. Earlier, the price reached $19,786, the highest since March 2, 2012.
The potential for more economic sanctions by the U.S. and Europe against Russia boosted prices, according to Societe Generale SA. Russia is home to OAO GMK Norilsk Nickel, the biggest producer the refined metal. The country is testing its army’s combat readiness, ramping up tensions after pledging a pullback from Ukraine’s border.
The Vale mishap ‘‘is adding to the general sense that the market is facing a supply shortage over the coming months, if not years,’’ Robin Bhar, an analyst at Societe Generale in London, said in a telephone interview.
‘‘Acid spills generally tend to be not that significant,’’ Bhar said. ‘‘If that’s the case, production could be up and running fairly soon.’’
Copper rose 1.1 percent to $6,729 a ton ($3.05 a pound) on the LME. Lead, zinc and tin gained, while aluminum fell.
On the Comex in New York, copper futures for July delivery climbed 1 percent to $3.0625 a pound. The price has dropped 9.8 percent this year.