Nickel prices shoot up in Asia

Nickel prices shoot up in Asia

SINGAPORE (Reuter): Nickel prices shot up in Asian trade yesterday to US$7,215/20 at 0225 GMT after three-month metal closed on the London Metal Exchange (LME) on Monday at $7,025 on news workers at Inco Ltd.'s Sudbury nickel smelter in Canada have voted to strike.

"That's why nickel is already up almost $200 in Asian trade," a senior dealer for a European metal trading company in Singapore told Reuters.

The union representing the 4,670 workers at Inco Ltd's Sudbury operations at the nickel giant's mining, smelting and refinery operations in Sudbury and the refinery in Port Colborne in Ontario, Canada voted on Monday to reject a tentative contract deal.

"I think nickel is going to go up to $7,300 on the LME," the general manager of a Japanese metal trading company said. "They (Inco) have a very big share of the nickel market."

Another dealer said three-month nickel should easily climb to $7,220 later on Tuesday on the LME.

The Ontario division was expected to produce about 230 million pounds of nickel, about 200 million pounds of copper and about four million pounds of cobalt.

In the copper market, dealers were divided over the impact of a report from Shanghai on Tuesday that China's Central Reserve Bureau has no immediate plans to sell copper.

Copper prices are expected to regain a toehold above the $2,500 a ton level later on Tuesday on the LME after the red metal closed on Monday at $2,485 a ton.

Three month copper was quoted by the trade at 0400 GMT at around $2,492/97 a ton.

"Copper should benefit from the coattails of nickel," one dealer said. "It might try to get back above $2,500. It seems to be consolidating and building a base around $2,500."

"I feel copper should firm up slightly," a Japanese dealer said. "We should see some consolidation at the $2,500 level."

In another development, rumors were swirling in the trade that up to 40,000 tons of zinc will be arriving in Singapore from China.

"There's a rumor that there's 40,000 tons of zinc coming here in the next few weeks. The rumor has it that the Chinese smelters have given about 40,000 to 50,000 tons of zinc to the merchants to sell," a dealer said.

Traders estimate that about 10,000 tons of zinc remain off- warrant in Singapore.