* Nickel gains 50 pct in 2014 on supply woes
* Copper hits 2-month peak on China hopes, tight inventories
* Coming Up: U.S. Federal budget April at 1800 GMT
(Updates with new session high in electronic trading)
By Maytaal Angel and Harpreet Bhal
LONDON May 12 Nickel jumped 8 percent on Monday,
bringing gains for the year to 50 percent, as the threat of
tougher Western sanctions on the world's biggest producer Russia
compounded concerns about Indonesia's ban on unprocessed ore
Copper hit a two-month peak on top copper consumer China's
pledge on Friday to push ahead with a broad range of capital
market reforms and on growing worries about dwindling global
In wider markets, global equities advanced cautiously as
investors braced for a possible escalation in Ukraine's civil
conflict after pro-Moscow rebels declared victory in a
referendum on self-rule.
Western leaders have threatened more sanctions against
Russia in the key areas of energy, financial services and
engineering if Moscow disrupts a presidential election planned
in Ukraine on May 25.
The threats have boosted nickel on fears that an
increasingly out of control conflict might eventually result in
sanctions against Russia's Norilsk Nickel, a top nickel
Nickel buyers are already scrambling to secure supplies on
fears that the global market will fast move into deficit due to
Indonesia's ban in January on unprocessed ore exports.
LME nickel struck a session high of $21,468 a tonne
in electronic trading, its highest level since February 2012 and
up almost 8 percent from Friday's close. It was bid at $20,900 a
tonne at the closing ring.
Nickel is trading 50 percent higher so far this year.
"People are trying to work out where they're going to get
supply of nickel ore. There's a perception that over the next
6-12 months there will be a substantial deficit, so the market
has a natural momentum and it's hard to stand in the way of
that," said Nic Brown, head of commodities research at Natixis.
The price of nickel ore from the Philippines has more than
doubled since late February, as supplies have dried up from
rival producer Indonesia, previously the world's biggest
A shutdown of Vale's New Caledonian nickel
operations after an effluent spill late last week has also
increased nickel buying even though the shutdown is expected to
LME copper climbed to $6,895 a tonne, its highest
since March 7 in intraday trade. It closed up 2 percent at
$6,879 a tonne.
Daily LME data showed copper stocks MCUSTX-TOTAL in
official warehouses fell 3,000 tonnes to 205,325 tonnes, their
lowest since October 2008. Separate data on Friday showed
Shanghai stocks CU-STX-SGH are at 90,580 tonnes, their lowest
since December 2011.
Investors are looking for a pick-up in demand from top
consumer China to push copper prices higher. China accounts for
40 percent of global refined copper demand.
Recent factory surveys pointed to initial signs of
stabilisation in the world's second-largest economy as the
government uses targeted measures, including accelerated
spending on railways and affordable housing, to underpin growth.
"Investors clearly seem to be hoping that the Chinese
government will be more aggressive in responding to the
(economic) weakness that is now more evident in broad swaths of
the economy," said Ed Meir, analyst at INTL FCStone.
Investors are also banking on more policy support from the
U.S. and euro zone central banks. Dovish comments from Federal
Reserve Chair Janet Yellen and European Central Bank President
Mario Draghi last week underpinned risk assets around the globe.
In other metals, aluminium ended 1.4 percent higher
at $1,786 a tonne, zinc ended up 2.2 percent at $2,080,
lead closed 2 percent higher at $2,125.50 and tin
ended 0.8 percent lower at $22,975 a tonne.
In industry news, wait times to get metal out of warehouse
firms owned by trade house Glencore and bank Goldman Sachs
stretch up to two years, according the LME's first report
detailing backlogs at its global network of depots.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
($1 = 6.2280 Chinese Yuan)
(Additional reporting by Melanie Burton in Sydney; editing by
Susan Thomas and David Evans)