Nickel ends lower after Sudbury strike avertedadmin
Nickel futures fell 3 percent at one point on the London Metal Exchange on Thursday and the metal ended lower as a possible strike at Xstrata’s Sudbury operations was prevented.
Three-months futures traded as low as $35,900 per ton, down $1,200 from its previous closing price, before narrowing losses to $36,850 at the close.
The Anglo-Swiss mining firm and the union representing around 1,000 workers reached tentative agreement on a new contract late on Wednesday, narrowly avoiding a strike which would have further tightened supply of the metal.
“The focus is back again on dwindling stock levels, off another 600 (metric tons) today, and forcing the market to pare earlier losses caused by the Sudbury settlement,” analyst Edward Meir of Man Financial said in a market report.
“We like the odds of the upside resuming at this stage.”
Traders said the fall in price was predictably short-lived, given the scarcity of metal on the market.
“The news is out there but I don’t think many people expected there to be a long strike,” one dealer said.
He said demand for metal was strong, and doubted people had been hoarding stocks in case of a strike.
“There are not going to be big deliveries back to warehouses due to this non-event.”
At around $36,500, nickel is up $2,000 on the start of the year, but almost $2,500 down from the all-time high it reached last month.
Xstrata shares were up around 2.5 percent at the close. BHP Billiton and Vedanta were also found amongst the ten strongest performers on the London Stock Exchange.
Copper closed at $5,600 down $135, whilst aluminum was up $23 at $2,753.
In New York, copper for March delivery settled down 6.40 cents, or nearly 2.5 percent, at $2.5305 a lb on the New York Mercantile Exchange’s COMEX division, near the lower end of its $2.5150-$2.6050 trading band.
Rising copper stocks, more than double since the start of last year to 216,100 metric tons or 4.5 days of global consumption, dampened sentiment.
The rise is a direct result of China running down stocks in 2006 and it has dented futures prices, which are down 36 percent from an all-time high of $8,800 a ton in May 2006.
A potential strike at the 115,000-tonne-a-year BHP Billiton mine, Cerro Colorado, in northern Chile slightly underpinned the copper price slightly and the metal was seen trading in ranges.
Zinc was down $85 at $3,390, lead fell $14 at $1,665 and tin was down $75 at $11,900.