LME nickel price jumps by 6%
Reuters reported that nickel prices on London Metal Exchange surged by 6% after BHP Billiton said it would close a 100,000 tonne per year nickel operation for four months for repairs.
LME nickel hit USD 24,585 a tonne in electronic trading, it’s highest since May 22nd 2008 and nickel for delivery in three months was quoted at USD 23,900.
A trader said that “This will be very significant. We will lose 25,000 tonnes of metal because of the shutdown. We already estimate the refined nickel market will be in deficit by 80,000 tonnes this year and this will just deepen the shortfall. It is time to forget about the stainless steel glut and falling demand.”
The Kalgoorlie smelter produces around 100,000 tonnes of nickel in matte a year which is fed into the Kwinana nickel refinery and also exported to other customers. BHP estimated the shutdown of the operations in Western Australia would reduce its nickel sales by 28,000 tonnes cutting world nickel supplies by almost 2%.
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