London Metal Exchange (LME) nickel and aluminium closed firmer at Monday's kerb finding favour with the funds, analysts and traders said.
"There has been a bit of rotation by the funds out of copper and into nickel and aluminium," Man Financial analyst Edward Meir told Reuters.
However, a trader said: "The funds are definitely buying nickel, but I don't think they are selling out of the other metals to do so," he said.
Traders described volumes as atrocious and said the market was volatile as the seasonal summer slow-down in the northern hemisphere sapped liquidity.
Three months nickel rose to $14,625 a tonne by the close, from $14,410 at Friday's evening kerb close. Nickel peaked at its highest in four months at $15,300 on Friday.
Traders and analysts were looking for the metal to target January's 15-year high at $17,720 ahead of $18,000.
Nickel stocks in LME warehouses fell 186 tonnes to 8,298 tonnes on Monday - their lowest since late 1991.
"Nickel remains strong due to the stock situation which has been eroding for the last 10 days," Meir said.
"Before stocks started to erode the market was looking good technically, establishing a base between $10,000 and $12,000," he added.
Analysts at Macquarie Bank said they had been falling at a rate of over 1,000 tonnes per week since early May and noted that nearly 1,500 tonnes of the total was on cancelled warrant, which means it is scheduled for withdrawal from warehouses in the next few days or weeks.
"So how high can prices go? As we saw in the last run-up, when nickel prices start to move the sky is the limit," Macquarie said in a report.
Cash/threes rose to $500/550 a tonne backwardation, having spent most of June fluctuating between $95 and $120.
Traders expected little relief following a statement by world number one nickel producer, Norilsk Nickel, that it had re-opened the arctic port of Dudinka after a regular halt caused by spring floods, a Norilsk spokesman said on Monday.
"Currently one vessel is being loaded, and tomorrow we expect another to arrive," the spokesman said, adding that the water level at the port is still high and vessels have to be loaded by barges.
Norilsk interrupts loading of copper, nickel and cobalt, bound for export markets, as well as concentrate for its refineries on the north-western Kola peninsula, at the end of May each year when ice breaks up on the Yenisei river.
Copper firmed to $2,623 from $2,615.
Aluminium strengthened to $1,714 from $1,707.
Tin closed lower at $8,575 from $8,900/925, and lead fell to $828 from $835. Zinc dropped $6 to $1,020.
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