LONDON: Nickel prices jumped to the strongest in nine months on Friday on unrest in nickel producer New Caledonia, while copper surged to a 25-month peak after China announced fresh support for its ailing property sector.
Three-month nickel on London Metal Exchange (LME) shot up 5.6% to $20,900 a metric ton by 1000 GMT, after having touched $21,150, the highest since August 2023.
Analyst Dan Smith said the rallies in nickel and copper may push higher in the short term as speculators keep buying, but supply-demand outlooks would eventually spur corrections, especially in nickel.
“We’ve seen some weird rallies in the sense that investors don’t seem to care much about fundamentals,” he said.
“We’re a bit cynical about how far the nickel rally can run. You look at the base metals and the one with the worst fundamentals is nickel.”
Rioting in French-ruled New Caledonia spurred a massive operation to regain control of the capital Noumea in a country that accounted for 6% of global mine nickel output last year.
CME copper near record high as shorts roll positions forwards
“Supply from New Caledonia is significant enough to move the needle, but it’s nothing compared to Indonesia. Supply growth from Indonesia is pretty amazing and is just going to swamp the market in six to 12 months.”
LME copper gained 0.7% to $10,496 per ton after hitting $10,555, the strongest since April 2022.
The market was lifted after China announced “historic” steps to stabilise the crisis-hit property sector, a major consumer of industrial metals.
The announcement came after China released data on Friday, showing better-than-expected factory output, but retail sales unexpectedly slowed and the property sector remained a drag on the economy.
U.S. Comex May copper futures slipped 0.2% to $4.881 a lb., heading farther away from its record peak of $5.1775 touched on Wednesday amid a short squeeze.
Some of the steam was taken out of the U.S. market when some parties with short positions rolled them forward instead of closing them out at a loss, traders said.
In other metals, LME aluminium added 0.4% to $2,598 a ton, zinc rose 0.2% to $2,967, tin gained 0.5% to $33,885, while lead fell 0.5% to $2,281.50.