Nickel extends record run

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Metal markets were buoyed on Thursday by supply concerns and news that China, the world’s largest consumer of metal, is using more copper than estimated.

This extended nickel’s record breaking run to seven successive sessions, tin touched another near 20-year high while copper rose by more than two per cent.

The copper market reacted positively when China’s National Bureau of Statistics released the 2006 year metal trade and production data.

The data showed China’s refined copper consumption in 2006 rose 15.4 per cent, confounding sceptics who forecasted a fall for the year.

The three-month copper price gained $135 to $5,855 a tonne yesterday.

“This is better-than -expected news for copper, [but] I think the copper market will remain in surplus this year and that will limit price advances,” said Michael Widmer, metals analyst at Calyon bank.

Nickel touched a new record of $38,400 a tonne, before easing to $38,200 in late trade on the London Metal Exchange.

Nickel prices are very sensitive to the threat of a potential strike at the Xstrata-owned Sudbury mine in Canada where unions and management are in talks to avert a strike. The mine accounts for 4 per cent of global nickel output.

The three-month tin price struck a high of $12,425 a tonne.

The three-month aluminium price dipped $12 to $2,792 a tonne. But aluminium cash prices remained at a strong premium to the forward price due to a large position taken by one market participant.

Aluminium cash prices were quoted at $2,925 a tonne, or a $133 premium.

Precious metals markets were also boosted by investor activity. The gold price touched a five-and-a-half month high of $654 a troy ounce, before easing to $648.80/$649.80 in late London trade; up $1.60 from the late quote in New York on Wednesday.

Crude futures prices eased after strong gains in the previous 48 hours.

ICE Brent crude futures for March delivery slipped 67 cents to $54.78 a barrel in late London trade.

March West Texas Intermediate fell 70 cents to $54.67 a barrel in early afternoon on the New York Mercantile Exchange.

Investors have already priced in WTI futures reaching $60 before the year’s end with the December WTI contract quoted at $60.20.

European emission prices for the first phase of the European Union scheme continued to fall to fresh depths as investors began to focus on the second phase, which starts next year.

December 2007 carbon dioxide emissions futures touched €3.55, having fallen 88 per cent from their peak last April.

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