METALS-Nickel hits month peak on worries about Indonesia export ban

Mon Dec 9, 2013 12:32pm EST

* Robust China trade data a promising sign for global growth

* Nerves hold over possible tapering of U.S. stimulus

* Indonesia tin shipments up 28 percent in November

* Indonesia seeks way around ore export ban

By Maytaal Angel and Eric Onstad

LONDON, Dec 9 (Reuters) - Nickel prices shot up to the highest levels in a month on Monday because of worries about the impact of a planned Indonesian ban on ore exports while copper rose due to upbeat Chinese trade data.

Three month nickel was the best performer of base metals on the London Metal Exchange (LME), closing 1.4 percent higher at $13,955 a tonne after touching the highest level since Nov. 8.

Investors have become increasingly concerned about the proposed ban due to start next month on ore exports from top nickel producer Indonesia, despite signs that there may not be a complete cut-off in shipments.

An Indonesian official said on Monday the government was still seeking a way around a mineral ore export ban that the country's parliament insists remains in place.

"The metal with the most direct leverage to Indonesian production is nickel," said analyst Gayle Berry of Barclays.

"The ramifications of a complete and sustained ban on Indonesian ore exports could be very significant for the refined market balance in 2014 and beyond," she added in a note.

Copper also hit a month high, but gave up most of its gains by the close, when it failed to trade. It was last bid at $7,130 a tonne, up 0.1 percent. Other metals touched multi-week highs.

Copper has been trading in a range of $6,602-$7,420 a tonne since June, and is looking to record falls of nearly 10 percent this year.

Copper got a boost after data showed China's imports of copper rose 7.1 percent while the country's exports beat forecasts in November, adding to recent evidence of economic stabilisation.

China consumes around 40 percent of the world's copper.

"Copper is trading at top of its range since mid-November, it's reluctant to break through but I think it will - the data backdrop has been positive, the forward curve suggests tightness, warehouse stocks are trending lower, everything is aligned for it to have a go on the upside," said Societe Generale analyst Jesper Dannesboe.

The U.S. Federal Reserve will host its key policy meeting next week, with the central bank having had great success convincing investors that tapering is not tightening, and that interest rates will remain low for a long time to come.

"There is a growing perception that tapering is no longer the end of the recovery," said Natixis analyst Nic Brown.

"We see $7,600 a tonne as a reasonable target in the very short-term. There is a high probability of a real physical shortage ... before we get to this panacea of abundant new mine supply at some time next year."

TIN EXPORTS

In other metals, refined tin shipments from top exporter Indonesia rose to 5,192.86 tonnes in November, up 28 percent from 4,069.77 tonnes in October, the trade ministry said.

Tin ended up 0.4 percent at $23,250 a tonne, having hit its highest since late October.

Aluminium gained 0.8 percent to finish at $1,793 a tonne, having earlier hit a two-and-a-half-week high.

"The (aluminium) complex has even managed to take out its short-term down channel over the course of the last week. We seem to be on track for a test of next resistance at $1835," said Edward Meir at INTL FCStone.

Lead climbed 0.8 percent to close at $2,110 a tonne, having earlier reached its highest in around two weeks.

Zinc, which failed to trade in closing rings, was last bid 0.7 percent higher at $1,918 a tonne, after hitting its highest since early November.

PRICES

Three month LME copper CMCU3

Most active ShFE copper SCFcv1

Three month LME aluminium CMAL3

Most active ShFE aluminium SAFcv1

Three month LME zinc CMZN3

Most active ShFE zinc SZNcv1

Three month LME lead CMPB3

Most active ShFE lead SPBcv1

Three month LME nickel CMNI3

Three month LME tin CMSN3