Nickel prices hit three-week highs on Thursday after the Philippines ordered the closure of 21 mines, mainly nickel producers that account for about half of output in the world's top ore supplier.
Benchmark nickel on the London Metal Exchange closed up 1.4 percent at $10,395 a tonne, having earlier touched $10,500, the strongest since January 11.
The campaign to fight environmental degradation in the Philippines, which prompted the mine closures, could mean the loss of 10 percent of global nickel supply, or nearly 2 million tonnes, analysts say.
"The Philippine authorities seem adamant ... offsetting that, though, is the news we had a couple of weeks ago about the partial lifting of the ban on Indonesian exports," said Caroline Bain, chief commodities economist at Capital Economics.
Indonesia eased a three-year ban on nickel ore exports in January. Under the new rules mines can export up to 5.2 million tonnes of nickel ore a year.
However, analysts say that the rules accompanying the relaxation on using local smelter capacity to process low-grade ore could prevent an immediate ramp-up in exports.
"Maybe for the time being the Philippines news will be the bigger mover of prices," Bain said.
Philippine miners have said they will launch a legal challenge.
Three-month copper ended down 1 percent at $5,886 a tonne, near a two-month high of $6,007 hit on Wednesday on buying triggered by supply concerns.
Traders said that copper's failure to hold above $6,000 was behind the sell-off after New York opened, but they expect support to hold around $5,800, the 21-day moving average.
Focus is on BHP Billiton's Chilean mine Escondida, the world's biggest copper mine, where workers have voted to reject a company wage offer and strike.
Escondida's copper output for the six months to Dec. 31 stood at 452,0000 tonnes.
A loss of that magnitude this year could send the copper market into a deficit this year rather than the small surplus analysts were expecting in a Reuters survey.
"Supply disruptions have moved back into the focus of the copper market. A strike in Chile is looming ... It might still be averted as an extension of the negotiation period can be requested," Julius Baer analysts said in a note.
"As copper prices have already been rising with the strike becoming more and more likely, further upside should be limited.
This would be in line with the historical pattern."
Aluminium finished up 0.6 percent at $1,829, zinc slipped 1 percent to close at $2,851, lead ceded 0.3 percent to $2,340 and tin dipped 0.1 percent at $19,840.
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